Financial Analyst Metrics – Page 2

Base Net Burn is your Net Burn minus variable customer acquisition costs (CAC). It isolates the operational burn your business carries independent of growth investment, showing whether the business could survive without growth spending.

Bessemer Efficiency Score is a measure of capital efficiency that tracks net new ARR against net burn for a given period. This metric showcases the incremental ARR dollars added for every dollar of burn, effectively measuring a company’s spending habits.

Bookings is a key sales metric that is calculated by taking the total dollar value, including subscription, implementation, and discounts, that a customer has committed to spend for a product or service within a specified period.

Burn Multiple is a capital efficiency metric that measures how many dollars a startup burns (spends) to generate each dollar of net new Annual Recurring Revenue (ARR). Calculated as Net Burn divided by Net New ARR, this metric evaluates the cost-effectiveness of revenue growth. A higher Burn Multiple indicates the company is spending more capital per dollar of growth, while a lower Burn Multiple indicates more efficient, capital-efficient growth.

Burn Rate is the speed at which a company spends its cash reserves, typically measured monthly or as a percentage change in net spending. Startups use it to monitor how quickly they draw down external funding, estimate cash runway, and prepare for future fundraising. It can be calculated as Gross Burn Rate or Net Burn Rate.

Cash and Cash Equivalents (CCE) is the total value of a company's cash on hand plus short-term liquid assets convertible to cash within three months. CCE appears as the first line item on a company's balance sheet and is a primary indicator of liquidity. A strong CCE balance signals the ability to meet operating obligations, service short-term debt, and fund growth without external financing.

The Cash Conversion Cycle, also knows as Cash-to-Cash Cycle Time, is the time between when a business pays its suppliers and when the business receives payment from its customers, usually expressed in days. Keeping active tabs on your Cash Conversion Cycle will aid you in monitoring your finances as cash flows in and out of your business.

Cash Conversion Score is used by investors to measure the return on invested capital for startups. It is calculated by dividing current ARR by the difference between total raised capital and cash on hand. Essentially, this metric gives the return on each dollar invested in a company.

Charges represent the total amount of customer payments processed through your payment gateway, net of refunds, disputes, and reversals. Depending on the payment platform, Charges may be reported before or after processing fees; in analytics and finance contexts, this metric is often aligned with net charges collected rather than gross payment volume. Charges reflect the actual value of customer payments successfully processed and retained through a payment system.

Changes Count measures the total number of Charges you have made to your customers. Use this metric to have an overall view of how many payments you have accepted from your customers for the products or services you sold.

Contribution margin is the revenue remaining after subtracting variable costs — the amount available to cover fixed costs and generate profit. It can be expressed as a total dollar amount, per unit, or as a percentage of revenue.

The Cost Of Goods Sold (COGS) is the measure of direct costs incurred by a company to manufacture or deliver their product or service. Costs typically include raw material and direct labour, but this varies from business to business, depending on the products or services that are being sold. COGS is the building block to understanding Gross Margin and Gross Margin Percent.