FP&A glossary
The metrics FP&A teams live in — defined in plain language, each with its formula, the plain-English Sumwise question that computes it, and a worked example you can re-run on the sample export.
run-rate
Run rate
A trailing period's revenue annualized to a full year — the forward-looking size of the business.
Definition & formulaburn-rate
Burn rate
How much cash the company consumes per month — net of what's coming back in.
Definition & formularunway
Runway
Months of cash left at the current burn — cash balance ÷ average monthly net burn.
Definition & formulavariance-percent
Variance percent
How far an actual landed from its benchmark, as a share of the benchmark — (actual − plan) ÷ plan.
Definition & formularolling-forecast
Rolling forecast
Actuals for closed months plus a re-cut forecast for the rest of the year — same horizon, refreshed every cycle.
Definition & formulaseasonality
Seasonality
A pattern that repeats on a fixed calendar — measured as a seasonal index, period average ÷ overall average.
Definition & formulaebitda-margin
EBITDA margin
EBITDA as a percent of revenue — operating profitability before depreciation, amortization, interest and tax.
Definition & formulagross-margin
Gross margin
What's left of revenue after the direct cost of delivering it — (revenue − COGS) ÷ revenue.
Definition & formulaarr
ARR
Annual recurring revenue — the yearly value of active recurring contracts, usually MRR × 12.
Definition & formulamrr
MRR
Monthly recurring revenue — the recurring, contracted revenue billed in a given month.
Definition & formulayear-over-year-growth
Year-over-year growth
Change versus the same period last year — (current − prior) ÷ prior, the growth measure that cancels seasonality.
Definition & formulaworking-capital
Working capital
The cash tied up in running the business day to day — current assets minus current liabilities.
Definition & formula