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Worden Discussion Forum » Customer Training & Support » Ask a Trainer - TC2000 version 12/18 » Rule of 40 - Bessemer Efficiency Ratio

Rule of 40 - Bessemer Efficiency Ratio Rate this Topic:
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SweetAndSour
Posted : Tuesday, October 16, 2018 3:54:09 AM
Registered User
Joined: 5/26/2017
Posts: 25

Hi Trainer

I would ask to add an additional fundamental ratio to TC2000. The Rule of 40 is based on the Bessemer Efficiency Ratio which measures a company’s efficiency by taking the sum total of a company’s percent growth + percent free cash flow (FCF) margin. This simple calculation quantifies the growth efficiency of a given cloud business. At different stages of a company’s life cycle, their Efficiency Score changes. But for the average public company a few years after IPO, an Efficiency Score above 40 is considered great.Deatils are here:

https://techcrunch.com/2016/11/28/how-to-estimate-a-companys-health-without-really-trying/

Would be great if we could scan for such a rating, specially with Tech Stocks.

Thanks
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Bruce_L
Posted : Tuesday, October 16, 2018 8:02:41 AM


Worden Trainer

Joined: 10/7/2004
Posts: 65,138

Thank you for your suggestion.


-Bruce
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