Annual Run Rate is an annual revenue and expense calculation or annual run rate, an indicator that allows us to estimate the future financial performance of a company. It is a useful way to increase annual sales. It is estimated based on current financial information.
6 ways to calculate Run Rate:
1) Based on last quarter (quarterly revenue x 4)
2) Based on quarterly recurring revenue (quarterly recurring revenue x 4)
3) Seasonal revenue (final 12 months revenue)
4) Net revenue [(monthly revenue – monthly expenditure) x 12] 5) Based on costs incurred (monthly cost x 12)
6) Metrics (current monthly consumption x 12)