Quantitative
Run rate
Current performance scaled up to a full year.
Last reviewedWhat does Run rate mean?
It is quick but can mislead when the business is seasonal or changing fast, so say which period it is based on.
Example
A run rate takes recent results and scales them to a year, for example this month's revenue times 12.
Where does it come up in case interview prep?
- Mergers, acquisitions, and due diligenceLesson
- Digital and AI transformationLesson
- Organization and post-merger integrationLesson
- Asset and wealth unit economics: fee rates, mix, and the AUM bridgeLesson in Asset and wealth management
- SaaS unit economics: ARR bridge, NRR, CAC payback, and rule of 40Lesson in Software and SaaS
Related terms
- RevenueMoney earned from sales, before costs.
- ExhibitA chart or table the interviewer hands you to reason from.
- Percent versus percentage pointsA change in a rate is measured in points; its relative change in percent.
- CAGR (compound annual growth rate)The steady yearly growth rate that links a start value to an end value.
- Rule of 72Years to double is about 72 divided by the growth rate.
- Weighted averageAn average where each part counts in proportion to its size.
- Lakh and croreIndian number units: 1 lakh = 100,000 and 1 crore = 10 million.
- Market sizingEstimating how big a market or quantity is.