*Calculation assumes current performance remains constant over 365 days.
function toggleCustomDays() {
var periodType = document.getElementById("periodType").value;
var customGroup = document.getElementById("customDaysGroup");
if (periodType === "custom") {
customGroup.style.display = "block";
} else {
customGroup.style.display = "none";
}
}
function calculateRunRate() {
// Get inputs
var revenueInput = document.getElementById("currentRevenue").value;
var periodType = document.getElementById("periodType").value;
var customDaysInput = document.getElementById("customDays").value;
// Validation
if (revenueInput === "" || isNaN(revenueInput)) {
alert("Please enter a valid revenue amount.");
return;
}
var revenue = parseFloat(revenueInput);
var days = 0;
if (periodType === "custom") {
if (customDaysInput === "" || isNaN(customDaysInput) || Number(customDaysInput) <= 0) {
alert("Please enter a valid number of days for the custom period.");
return;
}
days = parseFloat(customDaysInput);
} else {
days = parseFloat(periodType);
}
// Calculation Logic
// Daily Rate = Revenue / Days
// Annual = Daily * 365
// Monthly = Annual / 12
// Quarterly = Annual / 4
var dailyRate = revenue / days;
var annualRunRate = dailyRate * 365;
var monthlyRunRate = annualRunRate / 12;
var quarterlyRunRate = annualRunRate / 4;
// Display Results
var formatter = new Intl.NumberFormat('en-US', {
style: 'currency',
currency: 'USD',
minimumFractionDigits: 2,
maximumFractionDigits: 2
});
document.getElementById("annualRunRateResult").innerHTML = formatter.format(annualRunRate);
document.getElementById("monthlyRunRateResult").innerHTML = formatter.format(monthlyRunRate);
document.getElementById("quarterlyRunRateResult").innerHTML = formatter.format(quarterlyRunRate);
document.getElementById("rrResult").style.display = "block";
}
How to Calculate Run Rate (Revenue)
In financial analysis and business forecasting, the Run Rate is a method used to predict future performance based on current data. It is most commonly used to annualize revenue data from a shorter period (like a month or a quarter) to estimate what the company's total annual revenue would be if current conditions remain unchanged.
This calculator allows startups, SaaS companies, and investors to quickly project Annual Recurring Revenue (ARR) based on shorter timeframes. It is a vital metric for understanding growth trajectory and current financial health.
The Run Rate Formula
The basic logic behind a run rate calculation is extrapolation. You take the performance of a specific period and extend it over a full year. The most precise formula calculates a daily average and multiplies it by 365.
Annual Run Rate = (Revenue in Period ÷ Days in Period) × 365
Alternatively, if you are calculating based on standard periods:
Monthly Data: Annual Run Rate = Monthly Revenue × 12
Quarterly Data: Annual Run Rate = Quarterly Revenue × 4
Example Calculation
Let's say your company generated $25,000 in revenue over the last 45 days. To find your Annual Run Rate:
First, calculate the daily revenue: $25,000 ÷ 45 = $555.55 per day.
Next, annualize this number: $555.55 × 365 = $202,777.78.
In this scenario, your Annual Run Rate is approximately $202,778.
When to Use Run Rate
Run rate is particularly useful for:
Young Companies: Startups with less than a year of history need run rate to demonstrate potential scale to investors.
Seasonal Adjustments: If a company has just launched a new product line, using the run rate of the post-launch period might reflect future earnings better than trailing 12-month data.
Sales Targets: Sales teams use run rates to check if they are "on track" to meet end-of-year quotas based on current velocity.
Limitations of Run Rate
While helpful, run rate assumes that the current environment will not change. It does not account for:
Seasonality: Calculating a run rate based on December sales (often high for retail) will drastically overestimate annual revenue.
Churn: In subscription businesses, it assumes customers stay forever unless a churn rate is applied separately.
One-time Events: A single large contract signed this month can skew the annual projection if it's unlikely to repeat every month.
Always use run rate as an estimation tool alongside other financial metrics like Cash Flow and Net Income.