Chief Financial Officer Metrics – Page 6

Natural Rate of Growth measures the speed at which your company grows, purely based on organic sources of growth. This includes organic signups and incremental recurring revenue started in product without sales involvement.

Net Annual Recurring Revenue (ARR) Added measures the net change in ARR during a period by combining all sources of ARR growth (new customers and expansion) and all sources of ARR contraction (churn and downgrades). This metric provides a comprehensive view of revenue momentum and reveals which business functions are driving growth or creating drag.

Net Burn, often referred to as Burn Rate, is the amount a company is losing per month as they burn through their cash reserves. It occurs when a company’s operating costs are higher than their revenue. A company that is profitable and generating cash has a "negative Net Burn".

Net Financial Debt (NFD) is the portion of a company's debt that remains after subtracting cash and short-term investments from total financial obligations. Unlike gross debt, NFD reflects what a company would owe if it used its most liquid assets to pay down borrowings immediately, giving analysts and executives a cleaner measure of leverage and liquidity risk.

Net Income is the profit remaining after subtracting all expenses, including COGS, operating costs, taxes, and interest, from total revenue. It appears at the bottom of the income statement and is one of the most direct measures of a business's profitability. Also called the bottom line, Net Income is used by investors, analysts, and management to evaluate financial health and guide strategic decisions.

Net Monthly Recurring Revenue (MRR) Churn Rate is the percentage change in MRR from existing customers due to expansions, cancellations, and downgrades. A negative Net MRR Churn Rate occurs when expansions exceed downgrades and cancellations and is a strong positive indicator of company health. This metric is typically expressed as a monthly rate, although it can also be calculated as an annual rate: Net Annual Recurring Revenue (ARR) Churn Rate.

Net Operating Profit After Tax (NOPAT) is a financial performance metric that calculates profit gained through core operations after taxes. This metric is used to measure operating efficiency without the impact of debt, because the calculation does not take tax benefits from debt into consideration. In other words, if a company has no debt, their NOPAT and net income after tax would be identical.

Net Present Value is the difference between the present value of cash inflows and the present value of cash outflows over a set period. It is used to determine whether an investment or project will generate more value than it costs.

Net profit is the value that remains after all expenses are subtracted from the company's total income. It is one of the best ways to determine a business' profitability and is often referred to as the bottom line. Net profit represents the ultimate financial outcome of all business activities during a specific period and appears as the final line item on the income statement, hence the term "bottom line."

Net Profit Margin shows net profit as a percentage of total revenue. It gives the net profit earned for every dollar of revenue generated and is a good indicator of profitability and operating expense management.

Net Sales is the revenue a business retains after subtracting discounts, product returns, and damaged goods from Gross Sales. It is a more accurate measure of actual earnings than Gross Sales alone.

New Accounts is the total count of new accounts created and includes free and paid accounts. This particular metric refers to new accounts you create as a business with a payment processing platform such as Stripe.