Run Rate
Definition
Run Rate extrapolates financial results into future periods. For startups, it indicates the expected financial performance based on current metrics.
Benefits
Run rate projects a startup`s future financial performance based on current metrics.
Frequently Asked Questions
What is the run rate formula? The run rate is calculated by multiplying the revenue or cost of a period (like a month) by the number of those periods in a year.
What does run rate mean in forecasting? Run rate is an estimate of a company’s future performance based on its current financial data, projected over a year.
What is the run rate formula? Run rate estimates future performance based on current financial results.
Summary
Run rate predicts future performance based on current financial numbers.