Kirk Kappelhoff

Accounts Payable (AP) Turnover Ratio

Contribution Margin

Contribution margin is the amount of revenue left from each sale after subtracting variable costs.

Cost Per Lead (CPL)

Cost Per Lead (CPL), also known as Cost Per Prospect, is a marketing metric that measures the average cost, in terms of money spent on marketing and advertising, to acquire one qualified lead. It is calculated by dividing the total expenditure on marketing activities by the number of leads generated within a specific timeframe.

Cash Conversion Score

The cash conversion score (CCS) is an efficiency metric that tracks how efficiently a startup converts its capital raised into recurring revenue. In SaaS, where upfront investments in product development, customer acquisition, and infrastructure are high, CCS is a vital indicator of strategic growth and financial sustainability.

ARR/FTE

Annual recurring revenue (ARR) per full-time equivalent (FTE)—also known as revenue ARR per employee, revenue per FTE, or, return on SaaS employees (ROSE)—measures a SaaS company's operational efficiency by calculating the recurring revenue generated per employee.

Cash Runway

Cash runway is the amount of time a business can continue to operate before it runs out of cash—assuming no new funding and spending stays at its current rate.

Bookings in SaaS

Bookings, also known as sales bookings or committed revenue, refers to the total “committed” value of all new contracts signed within a specific period, representing future revenue that a company “expects” to recognize, including recurring and non-recurring revenue commitments.

Rule of 40

The Rule of 40 states the sum of a SaaS company’s revenue growth and profit margin should be equal to or greater than 40%