Rule of 40
A rule of thumb for software companies: revenue growth plus profit margin (often the free cash flow margin) should add up to at least 40 %. A company growing 30 % with a 10 % margin passes; one growing 10 % at a loss does not.
A rule of thumb for software companies: revenue growth plus profit margin (often the free cash flow margin) should add up to at least 40 %. A company growing 30 % with a 10 % margin passes; one growing 10 % at a loss does not.