Unlocking SaaS Potential: Data-Driven Decisions
David's company, with $2 million in Annual Recurring Revenue (ARR), is generating attractive top-line growth. However, he struggles to accurately assess the efficiency of his capital allocation, particularly marketing spend and software development, making it difficult to compare the attractiveness of the acquisition offer versus the potential of scaling with Series A funding. The complexity of his personal portfolio, including vested and unvested RSUs, further complicates his decision-making.
By utilizing the ROIC Calculator, Golden Door Asset helped David quantify the Return on Invested Capital for each area of his business. The analysis revealed that while top-line growth was strong, certain marketing campaigns were underperforming, dragging down the overall ROIC to 12%. Armed with this data, David negotiated a higher acquisition price reflecting the untapped potential, or he can address the capital allocation issues and increase the company's value. We paired this with the Times Interest Earned Ratio calculator to show projected debt capacity in the event of taking the Series A, plus the Quick Ratio calculator to ensure liquidity when funding marketing programs.
The ROIC Calculator streamlined the analysis of David's financial data, providing a clear, quantifiable metric for evaluating investment efficiency. This allowed for objective comparison and data-driven decision making.
$750,000 increase in acquisition offer; 5% improvement in ROIC through optimized marketing spend.
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