Business formula collection
Customer and SaaS Metric Formulas
Customer metrics depend heavily on cohort, revenue and churn definitions. Document those rules before using a ratio as a target or comparing it with another company.
CACCalculate average customer acquisition cost from sales and marketing spending.Customer LTVEstimate customer lifetime revenue and gross-profit value from purchase behavior and margin.LTV:CAC RatioCompare modeled customer lifetime value with acquisition cost and calculate value remaining after CAC.Customer ChurnCalculate customer churn, retention, and ending customers for a selected period.Monthly Recurring RevenueCalculate ending MRR, net new MRR, and annual recurring revenue from subscription activity.
Use these formulas consistently
Use compatible cohorts
Lifetime value and acquisition cost should represent customers acquired through comparable channels and time periods.
Define churn explicitly
State whether pauses, failed payments, reactivations and plan changes count as churn and apply the rule consistently.
Reconcile with source systems
Validate dashboard metrics against billing and accounting records before using them for material decisions.