The Expected Revenue Calculator is a simple yet effective tool that helps individuals and businesses estimate the average revenue they can expect under various future scenarios. It is especially helpful when outcomes are uncertain, like in sales forecasting, project planning, or evaluating multiple business options. By assigning probabilities to different scenarios and estimating potential revenue from each, the calculator gives a clear, data-backed forecast that supports better financial decisions.
This tool is particularly useful in environments where revenue outcomes can vary significantly based on different market responses, customer behaviors, or economic factors. Whether you’re a business owner evaluating sales opportunities or a project manager calculating potential returns, this calculator helps you prepare realistically for what may come.
formula of Expected Revenue Calculator
Expected Revenue = (P₁ × R₁) + (P₂ × R₂) + … + (Pₙ × Rₙ)
Or, in summation notation:
Expected Revenue = Sum (Pᵢ × Rᵢ) for i = 1 to n
Where:
Expected Revenue = The anticipated average revenue (usually in currency units like USD, EUR, or PKR)
Pᵢ = Probability of scenario ‘i’ happening (between 0 and 1)
Rᵢ = Revenue from scenario ‘i’ (in currency units)
n = Total number of possible scenarios
The idea behind this formula is to calculate a weighted average of possible revenues. Each possible scenario contributes to the overall result based on its likelihood.
Table of Common Revenue Scenarios
| Scenario Description | Probability (Pᵢ) | Revenue (Rᵢ in USD) |
|---|---|---|
| High demand | 0.40 | 50,000 |
| Normal demand | 0.50 | 30,000 |
| Low demand | 0.10 | 10,000 |
| Conversion References | Value |
|---|---|
| 50% | 0.50 |
| 25% | 0.25 |
| Revenue in thousands (K) | Multiply by 1,000 |
| Revenue in lakhs (Lac) | Multiply by 100,000 |
These common values can be useful to keep in mind when using the calculator without doing manual conversion every time.
Example of Expected Revenue Calculator
Let’s say you’re launching a new product and have identified three possible demand scenarios:
- 40% chance of high demand with $50,000 in revenue
- 50% chance of normal demand with $30,000 in revenue
- 10% chance of low demand with $10,000 in revenue
To calculate the expected revenue:
Expected Revenue = (0.40 × 50,000) + (0.50 × 30,000) + (0.10 × 10,000)
Expected Revenue = 20,000 + 15,000 + 1,000 = 36,000
So, the average revenue you can expect from this product launch is $36,000.
Most Common FAQs
This is a financial calculator used for forecasting and estimating average revenue in uncertain situations.
No. The expected revenue is the average of all possible outcomes. You might earn more or less, but this value helps guide your expectations.
Yes. You can apply it to any time frame as long as your revenue and probabilities are based on that same period.