A performance metric is a computing tool to measure the performance, activities, and behavior of employees in an organization.
In this article at Forbes, Ron Shevlin suggests that investors need new performance metrics to evaluate startups’ progress.
A Pioneer in New Age Metrics
The world of business no more abides by grievously archaic accounting principles (GAAP). It is liable to startup accepted accounting principles (SAAP). So, here are four SAAP metrics for the startups to woo investors:
- Temporarily Unconverted Revenue from New Customers (TURN): This parameter helps to calculate the revenue generated through the top 10 percent of the consumers. Also, it immediately recognizes the revised revenue every time a new customer signs-in.
- Cumulative Revenue to Periodic Expense Ratio (CRePE Ratio): A startup can use this metric to report profitability via CRePE Ratio. It is the increasing revenue earned by the company over a year divided by the current period’s expenses.
- Non-Authenticated Promoter Score (NPS): Also known as NAPS, a non-authenticated promoter score is easy to calculate. It is measured by the number of app downloads in a specific period minus the customers deleted the app, divided by the total number of app downloads.
- Earnings Before Interest, Taxes, and Expenses (EBITEX): It is the calculation of net income before the deduction of income tax, interest, and operating expenses. In the upcoming decade, there is no reason to spare the operating expenses as it may bring down your profits.
Click on the following link to read the original article: https://www.forbes.com/sites/ronshevlin/2019/12/30/four-snarky-performance-metrics-for-startup/#6d056ea86dbd