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How to Calculate the Average Revenue Per Unit

Original post by Jade Balle of Demand Media

The average revenue per unit (ARPU) is a term used frequently in accounting for the telecommunications industry. It reflects the average amount of sales a company generates per subscriber (or unit) in a given time period — usually one month. The ARPU provides an idea of how much the business brings in per customer. The higher this figure the better for the company.

Contents

Step 1

Determine the total gross revenue for the period based on sales records. Say, for example, the company generates $10,485 in revenue in one month from customers.

Step 2

Determine the total number of users or units for the period. In most cases a unit is equivalent to one subscriber to a service business. Averaging is required because the number of subscribers may vary on a day-to-day basis. Add up the total number of subscribers active on each day of the month, then divide that figure by the number of days in the month to calculate the average. Assume an average of 1,253 units.

Step 3

Divide the revenue by the average units for the time period in question. In this example the total ARPU is $8.37 (10,485 divided by 1,253).


                   

References

About the Author

Jade Balle has been writing Web articles since 2004, covering everything from business promotion to topics on beauty. Her work can be found on various websites. She has a small-business background and experience as a layout and graphics designer for Web and book projects.


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