Run Rate Calculator

Formula

The formula to calculate the Run Rate (RR) is:

\[ RR = RP \times PPY \]

Where:

$ RR $ is the run rate ($/year).
$ RP $ is the revenue per period ($).
$ PPY $ is the periods per year.

What is a Run Rate?

A run rate is defined as the total annual revenue earned by a business. It is typically used when analyzing SaaS (software as a service) businesses to project future revenue based on current performance.

Example Calculation

Consider an example where:

Revenue per Period (RP): $5000
Periods per Year (PPY): 12

Using the formula to calculate the Run Rate:

\[ RR = 5000 \times 12 = 60000 \text{ dollars per year} \]

This means that the run rate for this example is $60,000 per year.