Rule of 40 Calculator
Growth plus profitability in one score.
Enter your values
ⓘ Live results
Results
- Rule of 40 score
- 31.1
- Revenue growth
- 39%
- Profit margin
- -7.9%
- Verdict
- Short by 8.9 points
- Margin needed to reach 40
- 1%
- Growth needed to reach 40
- 47.9%
- Profit needed at current growth
- $111,219.51
Quick answer
Rule of 40 score = revenue growth rate % + profit margin %. A score of 40 or more signals a healthy balance between growth and profitability.
Score = growth % + margin %
How to use the Rule of 40 Calculator
- 1Enter revenue for last year and this year.
- 2Enter EBITDA or free cash flow — a loss is a negative number.
- 3Compare the score against the 40-point benchmark.
Worked example
Using the values the calculator loads with:
Inputs
- Revenue last year8200000 $
- Revenue this year11400000 $
- EBITDA or free cash flow-900000 $
Results
- Rule of 40 score31.1
- Revenue growth39%
- Profit margin-7.9%
- VerdictShort by 8.9 points
- Margin needed to reach 401%
- Growth needed to reach 4047.9%
- Profit needed at current growth$111,219.51
Frequently asked questions
Which profit measure should I use?
Free cash flow margin is the strictest and most common with investors; EBITDA is acceptable if you apply it consistently across periods.
Is a score above 40 always good?
Usually, but a very high score driven by margin alone can mean you are under-investing in growth while the market is still open.
About this calculator
- Built and reviewed by James Whitfield · How we build and test calculators
- Report an error
Results are estimates for general information. For medical, legal, structural or financial decisions, confirm with a qualified professional.