Finance Metrics

The most important Finance metrics and KPIs. Learn about what metrics and KPIs are best for you, vote, and contribute your own.

Revenue per Employee

Revenue per Employee is a measure of the total Revenue for the last twelve months (LTM) divided by the current number of Full-Time Equivalent employees. Also known as Revenue to Employee Ratio, this ratio is among the most universally applicable and is often used to compare companies within the same industry.

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SaaS Magic Number

The SaaS Magic Number is a ratio showing yearly recurring revenue growth gained for every sales and marketing dollar spent. It indicates the level of operational efficiency of a company, as well as the sustainability of sales and marketing expenditure.

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SaaS Quick Ratio

SaaS Quick Ratio is used to measure the growth efficiency of a company, but is often overlooked by early stage entrepreneurs and investors. Think of SaaS Quick Ratio as a health measure of company growth.

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Serviceable Addressable Market

SAM measures the revenue opportunity of capturing a specific market for a product or service within your limitations and reach.

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Serviceable Obtainable Market

Serviceable Obtainable Market (SOM) measures the realistic revenue potential of a product or service in a particular market.

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Subscribers

The Subscribers metric counts the number of paid or non-paid users who have periodic access to a product or service. Most often, this metric refers to a subscription-based business model, for example, newspapers, magazines, phone, internet service, the use of software-as-a-service (SaaS), or even access to seasonal theatre performance.

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The Rule of 40

The Rule of 40 is a SaaS financial metric that balances revenue growth versus profit margins. It’s a rule of thumb to quickly determine the health and/or attractiveness of your SaaS company.

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Total Addressable Market

Total Addressable Market (TAM) is a measure of the revenue opportunity of capturing 100% of the market for a product or service.

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Won Opportunities

Won Opportunities is the count of sales opportunities that are “Closed Won”. It is a measure of success of the Sales, Marketing, and Product teams. "Closed Won" is the stage at which a quote or proposal has been signed or electronically accepted and is now considered fulfillable. Counter to Won Customers, Won Opportunities apply to both new and existing customers.

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