Run Rate Calculator
This calculator helps you estimate your company's future revenue based on its current performance.
Your Projected Run Rate:
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Understanding Run Rate
Run rate is a crucial metric for businesses, especially startups and fast-growing companies, to project their future revenue based on their current performance over a specific period. It essentially annualizes a company's current revenue or profit to give a snapshot of its potential financial trajectory.
How it works: The most common way to calculate run rate is to take the revenue generated over a specific period (like a quarter or a month) and multiply it by the number of such periods in a year.
For example, if a company generates $1,000,000 in revenue in a 3-month quarter, its quarterly run rate would be $1,000,000. To project this to an annual run rate, you would multiply this quarterly revenue by 4 (since there are 4 quarters in a year), resulting in an annual run rate of $4,000,000.
This calculator takes your current revenue, the time period it represents, and projects it over a target period (defaulting to 12 months for an annual projection). While a useful tool for forecasting, it's important to remember that run rate is a projection and doesn't account for external factors, market changes, or shifts in business strategy that could impact actual future revenue.
Formula: Run Rate = (Current Revenue / Time Period for Current Revenue) * Target Period for Projection
This calculator uses this formula to provide you with a projected run rate.