what is ARR ? how is it calculated?
Answers
Answer:
The Accounting Rate of Return formula is as follows: ARR = average annual profit / average investment.
Hope it helps you
Answer:
The Accounting Rate of Return formula is as follows: ARR = average annual profit / average investment.
Explanation:
ARR = Average Annual Profit / Average Investment
ARR = Average Annual Profit / Average Investment Where: Average Annual Profit = Total profit over Investment Period / Number of Years. Average Investment = (Book Value at Year 1 + Book Value at End of Useful Life) / 2.
ARR is an acronym for Annual Recurring Revenue and a key metric used by SaaS or subscription businesses that have Term subscription agreements, meaning there is a defined contract length. ARR is the value of the contracted recurring revenue components of your term subscriptions normalized to a one-year period.