Cash conversion cycle:
[Deferred income - cash generation cycle skewed by deferred income]
B2largeB
Monthly rolling does not give the same skewing effect as B2largeB where annual billing cycles are involved. Try to get statistics on what % of the companies have upfront payments.
Other abbreviations
- PP = Prepayments
- RR = Recurring Revenue
- NR = Non-Recurring Revenue
- YTD = Year To Date
- BP = Best Practices
- DI = Deferred Income
- AI = Accrued Income
Constellation metrics
I think ROIC (properly calculated) in excess of 20% is attractive. The smaller the delas you are doing – should be higher. Can be a bit lower for bigger deals (10s of million or more). Mark Leonard used to provide their ROIC and looked at ROIC + Organic growth as a key metric to measure progress. It is in the letters he use to write and was sually in 30% range at that time. I think its a bit lower now but still in excess of 20%. SO that gives you the high bar.