finance-metrics-quickref

Imported from nnplinggg/minerva_pathfinder (Product-Manager-Skills/skills/finance-metrics-quickref/SKILL.md). Install upstream with npx skills add nnplinggg/minerva_pathfinder --skill finance-metrics-quickref. Copyright stays with the author.

Purpose

Quick reference for any SaaS finance metric without deep teaching. Use this when you need a fast formula lookup, benchmark check, or decision framework reminder. For detailed explanations, calculations, and examples, see the related deep-dive skills.

This is not a teaching tool—it's a cheat sheet optimized for speed. Scan, find, apply.

Key Concepts

Metric Categories

Metrics are organized into four families:

1. Revenue & Growth — Top-line money (revenue, ARPU, ARPA, MRR/ARR, churn, NRR, expansion)
2. Unit Economics — Customer-level profitability (CAC, LTV, payback, margins)
3. Capital Efficiency — Cash management (burn rate, runway, OpEx, net income)
4. Efficiency Ratios — Growth vs. profitability balance (Rule of 40, magic number)

When to Use This Skill

Use this when:

• You need a quick formula or benchmark
• You're preparing for a board meeting or investor call
• You're evaluating a decision and need to check which metrics matter
• You want to identify red flags quickly

Don't use this when:

• You need detailed calculation guidance (use saas-revenue-growth-metrics or saas-economics-efficiency-metrics)
• You're learning these metrics for the first time (start with deep-dive skills)
• You need examples and common pitfalls (covered in related skills)

Application

All Metrics Reference Table

Quick Decision Frameworks

Use these frameworks to combine metrics for common PM decisions.

Framework 1: Should We Build This Feature?

Ask:

1. Revenue impact? Direct (pricing, add-on) or indirect (retention, conversion)?
2. Margin impact? What's the COGS? Does it dilute margins?
3. ROI? Revenue impact / Development cost

Build if:

• ROI >3x in year one (direct monetization), OR
• LTV impact >10x development cost (retention), OR
• Strategic value overrides short-term ROI

Don't build if:

• Negative contribution margin even with optimistic adoption
• Payback period exceeds average customer lifetime

Metrics to check: Revenue, Gross Margin, LTV, Contribution Margin

Framework 2: Should We Scale This Acquisition Channel?

Ask:

1. Unit economics? CAC, LTV, LTV:CAC ratio
2. Cash efficiency? Payback period
3. Customer quality? Cohort retention, NRR by channel
4. Scalability? Magic Number, addressable volume

Scale if:

• LTV:CAC >3:1 AND
• Payback <18 months AND
• Customer quality meets/beats other channels AND
• Magic Number >0.75

Don't scale if:

• LTV:CAC <1.5:1 AND
• No clear path to improvement

Metrics to check: CAC, LTV, LTV:CAC, Payback Period, NRR, Magic Number

Framework 3: Should We Change Pricing?

Ask:

1. ARPU/ARPA impact? Will revenue per customer increase?
2. Conversion impact? Help or hurt trial-to-paid conversion?
3. Churn impact? Create churn risk or reduce it?
4. NRR impact? Enable expansion or create contraction?

Implement if:

• Net revenue impact positive after churn risk
• Can test with segment before broad rollout

Don't change if:

• High churn risk without offsetting expansion
• Can't test hypothesis before committing

Metrics to check: ARPU, ARPA, Churn Rate, NRR, CAC Payback

Framework 4: Is the Business Healthy?

Check by stage:

Early Stage (Pre-$10M ARR):

• Growth Rate >50% YoY
• LTV:CAC >3:1
• Gross Margin >70%
• Runway >12 months

Growth Stage ($10M-$50M ARR):

• Growth Rate >40% YoY
• NRR >100%
• Rule of 40 >40
• Magic Number >0.75

Scale Stage ($50M+ ARR):

• Growth Rate >25% YoY
• NRR >110%
• Rule of 40 >40
• Profit Margin >10%

Metrics to check: Revenue Growth, NRR, LTV:CAC, Rule of 40, Magic Number, Gross Margin

Red Flags by Category

Revenue & Growth Red Flags

Unit Economics Red Flags

Capital Efficiency Red Flags

When to Use Which Metric

Prioritizing features:

• Revenue impact → Revenue, ARPU, Expansion Revenue
• Margin impact → Gross Margin, Contribution Margin
• ROI → LTV impact, Development cost

Evaluating channels:

• Acquisition cost → CAC, CAC by Channel
• Customer value → LTV, NRR by Channel
• Payback → Payback Period, CAC Payback by Channel
• Scalability → Magic Number

Pricing decisions:

• Monetization → ARPU, ARPA, ACV
• Impact → Churn Rate, NRR, Expansion Revenue
• Efficiency → CAC Payback (will pricing change affect it?)

Business health:

• Growth → Revenue Growth, MRR/ARR Growth
• Retention → Churn Rate, NRR, Quick Ratio
• Economics → LTV:CAC, Payback Period, Gross Margin
• Efficiency → Rule of 40, Magic Number, Operating Leverage
• Survival → Burn Rate, Runway

Board/investor reporting:

• Key metrics: ARR, Revenue Growth %, NRR, LTV:CAC, Rule of 40, Magic Number, Burn Rate, Runway
• Stage-specific: Early stage emphasize growth + unit economics; Growth stage emphasize Rule of 40 + Magic Number; Scale stage emphasize profitability + efficiency

Examples

Example 1: Feature Investment Sanity Check

You are deciding whether to build a premium export feature.

1. Use Framework 1 (Should We Build This Feature?)
2. Pull baseline metrics: ARPU, Gross Margin, LTV, Contribution Margin
3. Model optimistic, base, and downside adoption
4. Reject if contribution margin turns negative in downside case

Quick output:

• Base case ROI: 3.8x
• Contribution margin impact: +4 points
• Decision: Build now, with a 90-day post-launch check on churn and expansion

Example 2: Channel Scale Decision

Paid social is generating many signups but weak retention.

1. Use Framework 2 (Should We Scale This Acquisition Channel?)
2. Check CAC, LTV:CAC, Payback Period, and NRR by channel
3. Compare against best-performing channel, not company average

Quick output:

• LTV:CAC: 1.6:1
• Payback: 26 months
• NRR: 88%
• Decision: Do not scale; cap spend and run targeted optimization tests

Common Pitfalls

• Using blended company averages instead of cohort or channel-level metrics
• Scaling acquisition when Quick Ratio is weak and retention is deteriorating
• Treating high LTV:CAC as sufficient without checking payback and runway impact
• Raising prices based on ARPU lift alone without modeling churn and contraction
• Comparing benchmarks across mismatched company stages or business models
• Tracking many metrics without a clear decision question

References

Related Skills (Deep Dives)

• saas-revenue-growth-metrics — Detailed guidance on revenue, retention, and growth metrics (13 metrics)
• saas-economics-efficiency-metrics — Detailed guidance on unit economics and capital efficiency (17 metrics)
• feature-investment-advisor — Uses these metrics to evaluate feature ROI
• acquisition-channel-advisor — Uses these metrics to evaluate channel viability
• finance-based-pricing-advisor — Uses these metrics to evaluate pricing changes
• business-health-diagnostic — Uses these metrics to diagnose business health

External Resources

• Bessemer Venture Partners: "SaaS Metrics 2.0" — Comprehensive SaaS benchmarking
• David Skok (Matrix Partners): "SaaS Metrics" blog series — Deep dive on unit economics
• Tomasz Tunguz (Redpoint): SaaS benchmarking research and blog
• ChartMogul, Baremetrics, ProfitWell: SaaS analytics platforms with metric definitions
• SaaStr: Annual SaaS benchmarking surveys

Provenance

• Adapted from research/finance/Finance_QuickRef.md
• Formulas from research/finance/Finance for Product Managers.md
• Decision frameworks from research/finance/Finance_For_PMs.Putting_It_Together_Synthesis.md