Key Metrics

The Key Metrics sheet is a presentation-level sheet in the Standard Financial Model that focuses on key management analysis metrics regarding growth, churn, customer acquisition costs (CAC), customer lifetime value, capital efficiency, and a standard annual ARR build.

Like the Key Reports sheet, it represents a starting point on the best way to summarize your business, and please make edits to make the sheet helpful to display the key metrics for your business.

Inputs

No inputs on the sheet.

How it works

The sheet calculates a number of annualized metrics from the base data on the Forecast and Statements sheets:

• ARR, Beginning of Period
• New ARR, New Revenue Units
• New ARR, Expansion from Existing Revenue Units
• Churn, lost Revenue Units
• Churned ARR, Contraction from Existing Revenue Units
• ARR, End of Period
• Y/Y % Growth
• Net New ARR
• Y/Y % Growth in New ARR
• Y/Y % Growth in Churned ARR
• Expansion ARR as % of New ARR

All of the above use the definition and rationale by Dave Kellogg at How to Present an Operating Plan to Your Board.

• Total Employees: at the end of each year

• ARR per Head, end of year: ARR at end of year / employees at end of year

• SaaS Magic Number: reported as of Q4 of each year, as defined by Mosaic at SaaS Magic Number

• Rule of 40: reported per year, as defined by Mosaic at Rule of 40

• Acquisition Costs: sum of all acquisition costs during year

• Average Revenue per Revenue Units: also known as ARPU (the "Revenue Units" will change based on your input on Get Started)

• Gross Margin per Revenue Units: gross margin during period / average number of customers (same note on the text changing as above)

• CAC, paid acquisition channels only: only including acquisitions through paid channels

• CAC, blended organic and paid: acquired from all channels

• CAC Payback Period (months): CAC divided by average gross margin, each year

• CAC Ratio: total acquisition costs per year / new ARR during year, as defined by Mosiac at SaaS Metrics Cheat Sheet

• LTV:CAC Ratio: LTV (below) divided by CAC (blended organic and paid, above)

• Customer Lifetime Value: from unit economics sheet, assuming new customer profile stays consistent over forecast period

Common Modifications

The goal of any presentation-level sheet in a model is to display metrics that help stakeholders understand the most important drivers of that business, and thus, you may find that your key metrics vary from the default on the sheet. That is expected, and you should delete, edit, and add metrics that help explain your business.

If you build custom revenue streams or customer segments, or want more detail in per-customer metrics, edit the calculations on this sheet to include them. The ARR build uses ARR from Forecast; link any recurring revenue into the MRR build on Forecast to include it in the ARR build on Forecast and Key Metrics. Customer-level metrics are calculated from the Revenues sheet and would need to be adjusted if you build custom customer calculations.