Enter the total revenue generated from orders and the total number of orders into the calculator to determine the average order value (AOV).

## AOV Formula

The following formula is used to calculate an average order value.

AOV = R / #O

- Where AOV is the average order value ($/order)
- R is the total revenue generated from all orders within a time period ($)
- #O is the total number of orders in the period

## AOV Definition

**What is AOV? **

AOV (average order value), is a financial term used to describe the average revenue generated per order or sale.

**Why does AOV matter? **

AOV is a key metric in understanding a business’s overall performance through all product offerings. This allows a business to compare the average order value to those of individual products to determine which ones are over-performing and which ones are under-performing.

## Example Problem

How to calculate AOV?

**First, determine the total revenue generated through all orders in a time period.**For this example, the time period is 1 year and the total revenue generated from all orders in that year comes to be $60,000.00.

**Next, determine the total number of orders in the same time period.**Over the past year, this business made a total of 4,000 orders.

**Finally, calculate the AOV.**Using the formula above, the average order value is found to be:

AOV = R/#O

AOV = $60,000/4000

AOV = $15 per order