Take a fascinating trip into the world of Financial Planning & Analysis (FP&A) metrics. Besides the usual metrics most businesses use, there are some unusual but enlightening metrics that can help your business plan and make decisions.
- Customer Attrition Cycle: This helpful metric measures how fast customers are leaving your business. Think about starting with 1000 customers and noticing that 100 leave within a month, that would mean a loss rate of 10%.
- Exit ARR (Annual Recurring Revenue): This is a forward-looking tool that predicts possible earnings based on what you're earning now. If your business made $10,000 this year, you could expect about the same next year unless big changes happen.
- Gross Burn Rate: This tells you how much your business spends. If your business spent $20,000 in a month, this is your burn rate.
- Payroll Headcount Ratio: This ratio shows how many employees one HR person is responsible for. If one HR person deals with 50 employees, the ratio is 1:50.
- Fixed Asset Turnover Ratio: This shows how well your business uses its assets like machinery to make money. If your business made $100,000 with assets worth $50,000, the ratio would be 2.
- SG&A Ratio (Selling, General and Administrative Expenses): This metric shows what part of your income goes to operational costs. If your business made $100,000 and spent $20,000 on operational expenses, the ratio would be 0.2 or 20%.
These unusual metrics, though they might seem strange at first, can provide useful information. They can guide your business towards success and help avoid possible problems, making them very valuable for your journey towards business excellence.
Learn more about useful metrics for different product stages and calculate them in our Metrics Library.