Unit Sales

What are 'Unit Sales'

Unit sales refer to the measure of the total sales that a firm earns in a given reporting period, as expressed on a per unit of output basis. Typically, when using or analyzing a unit sales figure, it should be based on a physical product, such as the number of tons of coal sold, rather than on the number of services rendered.

BREAKING DOWN 'Unit Sales'

Unit sales, which is a top-line item, is a useful figure for analysts because it enables them to determine average product prices and find possible margin pressure.

For example, assume XYZ Corp. has $250 million in revenue and it sold 5 million units. By taking the ratio of the two ($250 million/5 million), an analyst can see that the average selling price is $50 per unit. Suppose that in the next reporting period, that same firm had an average selling price of $48. The analyst could see this as a red flag, which could warrant more research into the firm.

RELATED TERMS
  1. Accounting Measurement

    The computation of economic or financial activities in terms ...
  2. Sales Mix Variance

    The difference in the quantity of customer purchases of each ...
  3. Financial Performance

    A subjective measure of how well a firm can use assets from its ...
  4. Marginal Revenue - MR

    The increase in revenue that results from the sale of one additional ...
  5. Sales To Cash Flow Ratio

    A comparison of a company's sales to its cash flow. The sales ...
  6. Retail Sales

    An aggregated measure of the sales of retail goods over a stated ...
Related Articles
  1. Investing

    Why Coal Won't Go Away Anytime Soon

    Despite government regulation, more competition and higher production costs, coal remains a relatively cheap source of fuel for electricity.
  2. Investing

    This Hated Commodity Could Prove To Be A Valuable Contrarian Investment

    <p>The first rule of contrarian investing: "Buy when there's blood in the streets." And the coal sector sure has been hemorrhaging. The char...
  3. Stock Analysis

    Coal's 2009 Problems To Linger In 2010

    Investors should expect a continued supply/demand problem from coal through 2010.
  4. Stock Analysis

    Why Coal Deserves Your Attention Right Now

    The coal sector has suffered for years at the hands of cheap natural gas and stiff regulations. But investors shouldn’t count out coal.
  5. Chart Advisor

    Now Is Not the Time to Trade a Bounce in Coal (KOL, TONS)

    These coal-related exchange traded products are trading near the resistance of their long-term moving averages.
  6. Stock Analysis

    Coal-Fired Portfolio Still A Good Bet

    Demand for coal is predicted to rise as energy demands increase and new infrastructure is created.
  7. Investing

    Is the Coal Investment Story Over?

    Is it time to exit coal stocks and coal ETFs? Investopedia assesses the future of the global coal business.
  8. Stock Analysis

    Earn 34.5% A Year -- From Coal?

    My personal portfolio is packed with mature sectors like energy, consumer staples and utilities for their higher income yield. Most of the industries within these sectors have fairly stable sales ...
  9. Stock Analysis

    Dirty Money: Coal Master Limited Partnerships

    Coal producers are trading for a fraction of their 52-week highs, revealing great opportunities for investors.
  10. Stock Analysis

    1 Opportunity and 1 Risk for United Continental (UAL, DAL)

    United Continental (NYSE: UAL) is one of the biggest airlines in the world, but bigger hasn't always been better. The integration of United Airlines and Continental Airlines hit lots of snags, ...
RELATED FAQS
  1. How does a company determine the right level of sales volume?

    Understand how companies determine sales volume. They use cost-volume-profit analysis which allows them to determine costs ... Read Answer >>
  2. What is the cost of living difference between the U.S and the U.K?

    Learn how consumers pay, on average, nearly 30 percent more for private goods and services in the United Kingdom than in ... Read Answer >>
  3. Why would my stock's value decline despite good news being released?

    More often than not, when a firm releases an earnings report the market will react to this news by adjusting the firm's stock ... Read Answer >>
  4. What is the point of calculating gross sales?

    Learn how doing simple gross sales and gross profit calculations can serve to help change a company's profit ratio and overall ... Read Answer >>
  5. Why is productivity an important concept in economics?

    See why the concept of productivity is so crucial to understanding economic growth, and why a standard of living directly ... Read Answer >>
  6. What is the relationship between marginal revenue and total revenue?

    Learn what total and marginal revenue are, how to calculate marginal revenue given total revenue, and how marginal and total ... Read Answer >>
Hot Definitions
  1. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  2. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  3. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  4. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  5. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
  6. Basis Point (BPS)

    A unit that is equal to 1/100th of 1%, and is used to denote the change in a financial instrument. The basis point is commonly ...
Trading Center