Evaluating Financials + Key Metrics
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Evaluating Financials + Key Metrics

What is this?

To go in depth on the financials of a business you should think about Summary Learning: The Financial ModelSummary Learning: The Financial Model. But it's important to understand what the key metrics are you want to have in mind when evaluating a business. For some businesses the most important metric might be net dollar retention or customer acquisition cost

You'll need a lot more than the three financial statement to get the full picture of how a business is doing. Aside from dollar-based numbers, there is a TON of important metrics that are just as important.

  • Retention, Engagement & Churn
    • https://a16z.simplecast.com/episodes/retention-engagement-metrics-cohort-analysis-platforms-marketplaces-zKgUegIs
    • https://podcasts.apple.com/us/podcast/good-churn-vs-bad-churn-by-magiclab-vp-of-product/id1219400787?i=1000468311267
    • Dollar-based retention, logo-based retention
  • Unit Economics (LTV/CAC)
  • Annual recurring revenue (ARR) growth
  • Margins

Tips & Tricks

  • Practical "how-to's"

Recommendations

  • Leader board of best content we've found
  • Open to replacing it as we find better stuff
Key Metrics: Other Resources