How to Calculate Inventory Turnover: The Practitioner’s Formula To calculate inventory turnover, divide your cost of goods sold (COGS) for a period by your average inventory value during that same period: Inventory Turnover = COGS ÷ Average Inventory. This ratio…
The $750k Mistake I Made on My First Exit Valuation If you want to know how to calculate business exit valuation, here is the practitioner’s formula: take your seller’s discretionary earnings (SDE) or adjusted EBITDA, multiply by an industry-specific multiple…
How to Calculate Gross Profit Margin in Three Steps Gross profit margin is (Revenue − Cost of Goods Sold) ÷ Revenue × 100. If you sell a widget for $100 and it costs $60 to produce, your gross profit is…
The Break-Even Point in Plain Terms—And the First Answer You Came For If you run a business or manage a product line, knowing how to calculate break even point is the difference between guessing and making a funded decision. The…
The Straight Answer: How Do I Calculate Business Cash Flow? If you’re staring at your bank balance wondering where the money went, here’s the unvarnished formula I’ve used for 15 years advising small firms: Net Cash Flow = Total Cash…
Why Most CLV Calculations Lie to You (And the Fix) If you’re asking how to calculate customer lifetime value, the simplest accurate formula is: for subscription businesses, CLV = (Average Revenue Per User × Gross Margin) ÷ Churn Rate; for…
If you’re searching for how to calculate marketing attribution revenue, here’s the straight answer from someone who has built these models for seven B2B companies: you assign a fractional credit weight to every marketing touchpoint that influenced a closed deal,…
The simplest answer to how to calculate churn rate is: divide the number of customers (or accounts) you lost during a specific period by the number you had at the start of that period, then multiply by 100. So if…
Why Most Coupon ROI Calculations Are Quietly Lying to You If you want to know how to calculate coupon campaign roi, start by throwing out any report that divides total promo-period sales by coupon spend. I learned this the hard…
What Influencer Cost Per Engagement Actually Means (And Why Most People Confuse It) If you want to know how to calculate influencer cost per engagement, here is the raw formula I use in every campaign debrief: divide total spent by…