Sales

- Sales (also known as revenue ) tell you the dollar amount of goods and services a company sells. This is important because what it really tells you is the amount of money being brought in as a result of the customers' desire for whatever the company is selling. It is also important, however, to know how much it costs to sell the goods and services offered by the company. This cost is called the Cost of Goods Sold.

Reason for improvement in sales
       - demand for product or services company provides increases (good observation)
       - Company is able to increase price of products/services (good observation)
       - company purchase some company or merged with some company (neutral observation).

Reason for decrease in sales
        - company might have sold some operation to other company (neutral observation).
        - demand for product or services company provides decreases (bad observation)

- growth in sales is more important than level of Sales
- if sales has gone down for one year and underlying problems are one time only and recoverable then it is OK to buy company.
- if sales has gone down for 3-4 years continuously then it is reason for worry, and you don't want to invest in company.
- compare the sales growth in the company you are researching with the growth in the industry.
- In general, sales growth of about 10% is considered good for large-cap companies. For mid-cap and small-cap companies, sales growth of over 20% is ideal.