Important Metrics in a Startup's Financial Statements

http://ttunguz.github.io/ten-financial-metrics

by nanopisaroni • 13 years ago

45 10 13 years ago

ttunguz.github.io

ctrl• 13 years ago

Great article, clear and to the point. Any suggested reading for one to dig further?

josephfung• 13 years ago

http://www.forentrepreneurs.com/saas-metrics-2/ is a good one for SaaS startups.

manishsharan• 13 years ago

I found this article to be very educational on start-up fundamentals ; where can find a sample income statement spreadsheet which illustrates the concepts and formalae in this article ?

nathanbb• 13 years ago

hey manishsharan, we have a collection of financial model templates within foundersuite.com. They are completely free to use / download.

when you login, go to Corporate Docs then click on the folder "Models". There's a SaaS model, an ad-revenue model, a subscription model and one or two others.

hope that helps, Nathan

simonswords82• 13 years ago

Thanks for this Nathan, I hadn't heard of foundersuite.com before now - looks like a great resource.

mathattack• 13 years ago

I'd be interesting in finding more about the source of the sales quota #s. And is that one time sales or lifetime revenue? (Since most new firms have a SAAS model now)

therealarmen• 13 years ago

This is why I love software companies:

Revenue per employee. The beauty of software businesses is their leverage. Google's market cap is 40% larger than Walmart but it has only 2% the size of Walmart's employee count.

johnrob• 13 years ago

The true measure of a company is how much profit it produces. Why does revenue per employee matter?

thwarted• 13 years ago

It's a measure of efficiency. A company that takes 100 people to produce $100 of profit isn't as efficient as a company that produces $100 of profit with one person.

How this ratio changes over time is a measure of scalability. If a one person company goes from $100 profit to $200 profit after doubling the number of people, that's more scalable than a 100 person company going from $100 profit to $200 after doubling the number of people.

swapnilsaykar• 13 years ago

I think the most important metric for a startup should be around whether customers are using a startup's product. For example, a company like DropBox will be most interested in a metric like TB stored with Dropbox across all customers. I believe as a startup this is the single most important metric that you should care about.

Important Metrics in a Startup's Financial Statements

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