• Finance , Higher Level Management ,
• 15 Dec

Cash Conversion Ratio (CCR) is a liquidity measure that compares the cash generated by a company compared to accounting profit in a given period. You may also hear this metric called the Cash Conversion Rate. It is often used in manufacturing type industries.  We can understand the financial health of a company using CCR. This

• Corporate Strategy , Economics , Finance , Higher Level Management ,
• 26 Sep

Economic Value Added (EVA) is a profit metric. It was created by the consulting firm Stern Value Management. The big difference between EVA and regular profit is that EVA takes into account the cost of capital. It shows the amount of economic value added with a positive value or destroyed with a negative value. This

• Economics , Finance , Higher Level Management ,
• 14 Jul

Payback Period is a “quick and dirty” method of calculating how long it will take to recoup an investment given the assumption or knowledge of future cash in-flows. You essentially have two pieces to this equation, the money you invested and the cash flows that come in each year. If it’s consistent cash flows coming

• Finance , Higher Level Management , Metrics and Ratios , SaaS ,
• 24 Mar

Committed Monthly Recurring Revenue is a metric that we use in forecasting recurring revenue in future periods. You may also hear CMRR  called Contracted Monthly Recurring Revenue.  CMRR gives you an idea of future inflows and outflows of Monthly Recurring Revenue which is important when managing a subscription based business model.  We build upon the

• Finance , Higher Level Management , Statistics ,
• 10 Mar

The Tracking Signal is a great high-level way to communicate and manage forecasting error bias. This can be really useful when using automatized or computerized forecasting systems. One way to use a tracking signal is to set up thresholds of acceptable error using color as representations of the validity of forecasting. While an actual traffic

• Finance , Higher Level Management , Metrics and Ratios ,
• 25 Feb

Average Revenue per User, or ARPU, is a metric that helps us look at the average monthly amount of revenue being generated by each user. This metric originated from the telecommunications business sector. It quickly takes available information and communicates it effeciently and effectively. It may sound surprising that some companies do not know the

• Corporate Strategy , Finance , Higher Level Management , Metrics and Ratios , SaaS ,
• 23 Feb

Net Revenue Churn is the percentage of revenue that is lost from existing customers in a month. It helps describe the overall health of a SaaS business. You want the measure as low as possible as you make money when this number is negative. This sometimes makes the metric feel counter-intuitive as you want most

• Computer Science , Data Science , Higher Level Management ,
• 12 Jan

When you start learning about the nuts and bolts of Machine Learning (ML) or Artificial Intelligence (AI), there are two concepts that will quickly surface to which you’ll need to understand. They are pretty basic ideas but a lot of ML and AI is understanding how to address a problem and this is part of

• Accounting , Corporate Strategy , Finance , Higher Level Management , Metrics and Ratios ,
• 26 Dec

Cash Conversion Cycle is really important for manufacturing companies. It tells us how many days it takes to go from investments in inventory and sales processes to cash flows. Another name for this is the Net Operating Cycle or Cash Cycle.  A low CCC could mean that the company is managing it’s operations well. I

• Finance , Higher Level Management , Statistics ,
• 13 Dec

We are going to go over eight different ways of measuring demand forecast error. We end with one of the most popular forecasting error metrics but, for better understanding, we start simple and work up to it. Keep in mind that budgeting and forecasting are a bit different. Forecasting is part of budgeting but the scope