Revision Cheat Sheet
By Pritesh Yadav 4 min read —
The dense one-pager. Review this before a board meeting, an investor call, or any moment you need the numbers at your fingertips.
Key Formulas
| Name | Formula | Quick example |
|---|---|---|
| Gross Profit | Revenue − COGS | $100k − $30k = $70k |
| Gross Margin % | Gross Profit ÷ Revenue × 100 | $70k ÷ $100k = 70% |
| Net Profit (Bottom Line) | Revenue − COGS − OpEx − Interest − Tax | $100k − $30k − $50k − $5k = $15k |
| Net Margin % | Net Profit ÷ Revenue × 100 | $15k ÷ $100k = 15% |
| EBITDA | Net Profit + Interest + Tax + Depreciation + Amortization | $15k + $5k + $0 + $4k = $24k |
| Balance Sheet Identity | Assets = Liabilities + Equity | $200k = $120k + $80k |
| Working Capital | Current Assets − Current Liabilities | $90k − $50k = $40k |
| Markup % | (Price − Cost) ÷ Cost × 100 | ($100 − $50) ÷ $50 = 100% |
| Margin % | (Price − Cost) ÷ Price × 100 | ($100 − $50) ÷ $100 = 50% |
| Contribution Margin (per unit) | Price − Variable Cost per unit | $100 − $40 = $60 |
| Break-even (units) | Fixed Costs ÷ Contribution Margin per unit | $30k ÷ $60 = 500 units |
| Break-even (revenue) | Fixed Costs ÷ Gross Margin % | $30k ÷ 0.60 = $50k |
| CAC | Total Sales & Marketing Spend ÷ New Customers Won | $10k ÷ 100 = $100 |
| LTV (simple) | (ARPU × Gross Margin %) ÷ Churn rate | ($50 × 0.8) ÷ 0.05 = $800 |
| LTV:CAC Ratio | LTV ÷ CAC | $800 ÷ $100 = 8:1 |
| CAC Payback (months) | CAC ÷ (ARPU × Gross Margin %) | $100 ÷ ($50 × 0.8) = 2.5 mo |
| MRR | Sum of all monthly subscription revenue | 200 users × $50 = $10k |
| ARR | MRR × 12 | $10k × 12 = $120k |
| Churn rate | Customers Lost ÷ Customers at Start of Period | 10 ÷ 200 = 5% |
| Net Burn | Cash Spent − Cash Received (per month) | $80k − $30k = $50k |
| Runway (months) | Cash in Bank ÷ Net Monthly Burn | $600k ÷ $50k = 12 mo |
| Burn Multiple | Net Cash Burned ÷ Net New ARR | $600k ÷ $400k = 1.5 |
| Rule of 40 | Growth Rate % + Profit Margin % | 30% + 15% = 45% ✓ |
| Magic Number | (New ARR this quarter) ÷ Prior-quarter S&M spend | $200k ÷ $250k = 0.8 |
| Post-money Valuation | Pre-money Valuation + New Investment | $8M + $2M = $10M |
| Investor Ownership % | Investment ÷ Post-money Valuation | $2M ÷ $10M = 20% |
| Dilution (your new %) | Old % × (1 − new investors' %) | 100% × (1 − 0.20) = 80% |
Key Benchmarks
| Metric | Healthy target |
|---|---|
| Gross Margin — SaaS/software | 70–85%+ |
| Gross Margin — services | 40–60% |
| Gross Margin — physical/retail | 30–50% |
| LTV:CAC ratio | ≥ 3:1 (below 1:1 = losing money per customer) |
| CAC Payback period | < 12 months (under 6 is excellent) |
| Monthly churn (SMB SaaS) | < 3–5%; lower is much better |
| Annual churn / want net revenue retention | NRR > 100% (revenue grows even with no new customers) |
| Runway — comfortable | 18+ months; raise/cut by 12; emergency under 6 |
| Burn Multiple | < 1 great · 1–1.5 good · 1.5–2 ok · >2 concerning |
| Rule of 40 (growth % + margin %) | ≥ 40% |
| Magic Number | > 0.75 (efficient to spend more on growth) |
| Net margin — sustainable business | 10–20%+ (varies widely by industry) |
| Default status | Default ALIVE — profitable before cash runs out |
Don't confuse these — the classic traps: Markup ≠ Margin (different denominator). Profit ≠ Cash (accrual vs. bank balance). Gross burn ≠ Net burn (runway uses net). Revenue growth ≠ a healthy business (check unit economics + churn).
The Numbers To Know Cold
If an investor or board member asks, you should answer these instantly — like your own phone number:
- Cash in the bank — today's actual balance.
- Net monthly burn — how fast cash is leaving.
- Runway — months left at current burn.
- Monthly revenue + growth rate — MRR/ARR and how fast it's climbing.
- Gross margin — how profitable each sale is.
- CAC and LTV (or LTV:CAC) — cost to win a customer vs. what they're worth.
- Churn — how fast customers leave.
- Default alive or default dead — do you reach profit before the cash runs out?
The one sentence to remember: Revenue proves people want it, profit proves the model works, and cash proves you survive long enough to find out. Watch all three — never just the top line.