📈 5 Metrics SaaS CFOs Swear By

(Hint: Growth alone isn't enough...)

Author

Aleksandar Stojanovic
March 23, 2025 • Read Time: 5 minutes

WELCOME TO ISSUE NO #047

📆 Today’s Rundown

Hey 👋, hope you had a great week! In the last issue, we discussed why tracking Burn Multiple matters, and now we are moving with the next topic from Cash Flow & Expenses content.

Let’s talk about ⬇️

Capital Efficiency

Because in today’s market, growing fast isn’t enough.

You’ve gotta grow smart.

Most SaaS founders think the game is just about top-line growth. But the real players? They know the money's made in how efficiently that growth is funded.

Here’s the truth:

🚨 You don’t need more capital. You need to do more with your capital.

Snl Do More GIF by Saturday Night Live

TL;DR

1️⃣ Cash Conversion Score

2️⃣ Burn Multiple

3️⃣ Return on Capital Employed (ROCE)

4️⃣ Bessemer Efficiency Score

5️⃣Hype Ratio

➕ Exclusive Content Drop 🆓

1️⃣ Cash Conversion Score

Measures the return on dollars invested. Here's how:

Cash Conversion Score = ARR / (Total Raised Capital - Cash Balance)

Bessemer benchmarks:

  • 🟡 Good (0.25-0.5x): ~40% IRR

  • 🟢 Better (0.5-1.0x): ~80% IRR

  • 🌟 Best (1.0x+): 120%+ IRR (investors love this)

2️⃣ Burn Multiple

Tracks how much you spend to earn new ARR. Simple and insightful…especially in volatile markets:

Burn Multiple = Net Burn / Net New ARR

Lower is better here…understand exactly how every dollar impacts your runway and growth.

The Office Finger Guns GIF

Want a Smarter Way to Track Capital Efficiency?

At Fiscallion, we make it easy.

We integrate with your ERP, pulling real-time financial metrics…including Capital Efficiency reports, burn rates, and cash flow trends…so you can make data-driven decisions in seconds.

No more guesswork. Just real insights that help your business grow.

Want to see how it works? Book a call today 👈

PS. Hit reply and let me know…what’s your biggest challenge with managing capital? I read every response.

3️⃣ Return on Capital Employed (ROCE)

Ideal for mature companies. Measures profitability:

ROCE = EBIT / (Total Assets - Current Liabilities)

Compare with competitors to assess marketplace standing clearly.

You Know Reaction GIF by MOODMAN

4️⃣ Bessemer Efficiency Score

Your quick pulse-check for scalability and resilience:

Efficiency Score = Net New ARR / Net Burn

Benchmarks:

  • 🟡 Good: under 0.5x

  • 🟢 Better: 0.5x-1.5x

  • 🌟 Best: above 1.5x (built for tough markets)

Breathe Drag Race GIF by RuPaul's Drag Race

5️⃣ Hype Ratio

Invented by Dave Kellogg, this evaluates investor excitement versus real ARR:

Hype Ratio = Capital Raised / ARR

Lower is ideal…too high signals buzz without real revenue. Aim between 1-3.

Happy Steve Harvey GIF by ABC Network

Bottom line?

Mastering these metrics positions you as a disciplined, efficient, and investable SaaS company.

Want to dive deeper or have specific questions about these metrics?

Just hit reply…I'm here to help!

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Aleksandar Stojanovic
Founder of Fiscallion
Fractional CFO & FP&A Boutique Consultancy

P.S. Whenever you’re ready, here’s how I can help:

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