Building a financial model for Software as a Service (SaaS) company typically requires creating a monthly model that forecasts users, subscriptions rates, churn rates, and average revenue per user (ARPU). From there, it resembles more of a traditional three statement model and includes operating expenses, as well as SaaS specific metrics such as customer acquisition cost (CAC), customer lifetime value (LTV), the LTV/CAC ratio, and payback period. In addition, the models typically include a discounted cash flow (DCF) valuation, sensitivity analysis, and charts and graphs.
CFI is the official global provider of financial modeling and valuation analyst FMVA Designation. CFI's mission is to help anyone become a world-class financial analyst and has a wide range of resources to help you along the way. In order to become a great financial analyst, below are some additional questions and answers for you to explore further:
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