Monthly recurring revenue (MRR) is a critical measure of your business’s income health. Knowing how much money you can expect each month lets you plan a realistic customer acquisition and retention budget.
Revenue is the amount of money a business receives in exchange for the products and services it sells. However, revenue can be split into two main categories: operating and non-operating. Operating revenue refers to the money generated from day-to-day business activities, whereas non-operating revenue refers to one-time events, such as the sale of a subsidiary to another party or realizing a gain on an investment.
Customer lifetime value (LTV) is the total profit you expect to receive from your average customer over their lifetime with your business. Hopefully, you’ll be able to keep the typical customer subscribed for a long time and can make more than one sale to them in the form of upgrades or additional services. LTV is the total profit you can expect to receive from all of those sales.
Net monthly revenue retention (MRR) churn is a metric used to measure how much revenue a company gains or loses every month. It is calculated in percentage terms by subtracting expansions — any new customers or add-ons — from the revenue churn rate, which refers to cancellations. Net MRR churn rates can be both positive and negative. A positive figure represents an overall decline, whereas a negative figure indicates a business is in a good position.
The quick ratio, also known as the acid test ratio, is a measure of a corporation's ability to pay down current liabilities using liquid assets — assets that can be quickly converted into cash. This would consist of things like cash, marketable securities, short-term investments, and accounts receivable. Basically, it's a good indication of whether a company is in good financial standing or has taken on more debt than it should have over a short-term period.
This Transactions template combines all of the critical attributes of your transactions so you don't have to manually join various tables together.
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