Revenue Run Rate Calculator

How it is calculated

The tool scales the revenue of a short period to a steady pace. Monthly = R / n, Annual = Monthly × 12 and Quarterly = Monthly × 3. R is the total revenue earned in the period and n is the length of that period in months, so a quarter is 3 and a single month is 1. Amounts are displayed in US dollars, but the figures are plain numbers, so any currency works if you read the result in the same one. Revenue can be zero but not negative, and the months must be above zero. A part-month such as 0.5 is accepted. The result assumes every month repeats the average, with no growth, churn or seasonality.

Common mistakes

• Typing the number of months wrongly for a quarter. Entering 1 with a quarter's revenue multiplies it by 12 instead of 4 and overstates the annual figure threefold.
• Using one unusually strong month. A holiday spike or a single large deal repeated 12 times produces a run rate that the business will not actually reach.
• Mixing in one-off income. Run rate works best with recurring revenue, so exclude things like asset sales or setup fees from the revenue box.
• Treating run rate as annual recurring revenue or as profit. It is a projection of gross revenue at a constant pace and says nothing about costs.
• Entering a negative revenue for a refund-heavy month. The tool does not accept it, so net the refunds out first and enter a zero or positive total.