Metric definitions

Every metric in this system ships with its formula, its period, its inputs, and its source. A KPI without a definition is a number people argue about in meetings.

The rule: MetricCard requires a definition. There is no variant without one. The definition is reachable from the card — an info affordance opening MetricDefinition, which shows the formula with the actual input values substituted.

Why this is a design problem

"ARR" means at least four different things across four companies. "Burn" might be gross or net. "DSO" has two accepted formulas that give different answers. Products that render these without definitions create the appearance of precision and the reality of confusion.

MetricDefinition renders:

  Net Revenue Retention                                    104.6%
  ────────────────────────────────────────────────────────────────
  (Starting MRR + Expansion − Contraction − Churn) ÷ Starting MRR
  (  412,000    +  61,400   −    18,200    − 24,100 ) ÷  412,000

  Cohort:  customers active on 1 Sep 2026
  Period:  1–30 Sep 2026
  Source:  subscription ledger · excludes one-time fees
  Note:    new customers excluded by definition

Formula, substituted values, cohort, period, source, and the caveat. That block is the component.

Liquidity & working capital

Profitability

EBITDA

Not a GAAP or IFRS line. Wherever it appears it must:

1. Appear below net income, in a separated non-GAAP block — never inside the P&L.
2. Show its reconciliation to net income, line by line.
3. State every adjustment. "Adjusted EBITDA" with unnamed adjustments is not a number, and the component requires the adjustment list.

The same rules apply to free cash flow, adjusted net income, and every other non-GAAP measure. NonGaapReconciliation exists specifically so this can't be skipped.

Cash & runway

Worked example. Cash and equivalents of $4,200,000; net burn of $210,000 in July, $230,000 in August and $250,000 in September, so trailing-3-month net burn is $230,000. Runway is 4,200,000 ÷ 230,000 = 18.26, rendered "18.3 months at trailing-3-month net burn". On September alone it is 4,200,000 ÷ 250,000 = 16.8 months — a 1.5-month difference from the choice of window alone, which is exactly why the window is stated. If the quarter's net burn of $690,000 bought $460,000 of net new ARR, the burn multiple is 690,000 ÷ 460,000 = 1.5×.

Runway rules:

• The burn basis is displayed on the card, not buried. "18.3 months at trailing-3-month net burn."
• The averaging window is stated — last month, trailing 3, trailing 6. A single anomalous month can double or halve the answer.
• The projection is dashed on any chart. It's a forecast.
• Committed but unpaid obligations (signed contracts, POs) should be disclosed alongside, because runway that ignores commitments is optimistic.

Recurring revenue

Definitions vary the most here, so the discipline matters the most.

Rules:

• MRR is not revenue. It's an operating metric derived from subscriptions and it will not tie to the P&L. Presenting them adjacent without stating that invites the question every board asks.
• The MRR bridge is the primary view — the waterfall from opening MRR through each movement to closing. A single MRR number with a percentage change explains nothing.
• NRR and GRR both, or neither. NRR alone hides churn behind expansion.
• Every cohort definition is stated. "Customers active on the first day of the period" is a choice, and a different choice gives a different answer.

Unit economics

Flag these clearly: these are not accounting measures. They rest on definitional choices with no standard, and the component makes those choices visible.

Rule: LTV computed on a monthly churn rate below ~1% produces an absurd number. The component caps the horizon (commonly 36 months) and displays the cap, rather than rendering a confidently wrong figure.

Leverage & coverage

Covenant metrics use the definition in the credit agreement, not the generic one. Lenders define "EBITDA" contractually, with specific add-backs. CovenantMonitor stores the contractual definition per covenant and computes against it, showing the headroom and the test date — and the number it displays may legitimately differ from the dashboard's EBITDA. That's not a bug, and the UI says so.

Display rules

1. Every metric carries its definition. No exceptions.
2. Every metric states its period and comparison basis. +5.3% vs. Aug, never a bare +5.3%.
3. Percentage points vs. percent are discriminated at the type level. See numerics.
4. polarity is required. Rising DPO, rising burn, and rising churn are not good news.
5. Division by zero renders n/a, never ∞, NaN, or 100%.
6. Non-GAAP measures are labeled and reconciled.
7. Metrics derived from unreconciled data are marked provisional. A KPI computed mid-close, before the bank is reconciled, is an estimate — and labeling it as such is what keeps people from quoting it externally.
8. Trailing averages state their window.
9. Ratios show their inputs on hover. 1.8× is not inspectable; $4.2M ÷ $2.3M is.
10. Metric definitions are versioned. When a definition changes, historical values computed under the old one are marked, because an unannounced definition change looks like a business change.