Annual Run Rate
It is a quick guess at yearly revenue based on what hit the bank this month — useful when you do not have a full year of books yet.
Formal definition
Annual run rate equals total monthly cash deposits multiplied by twelve, annualizing current monthly inflow.
Why it matters
Run rate helps owners and lenders gauge scale quickly, but it ignores seasonality and one-time deposits.
Where you see it
- Early-stage investor updates
- Monthly owner dashboards
- Sales team pacing reports
- Freelancer tax planning
- Quick feasibility checks
Worked example
- Monthly deposits: $35,000.
- Annual run rate = $35,000 × 12 = $420,000.
- Interpretation: Current monthly pace implies ~$420k annual cash in — not guaranteed.
How Business metrics calculates it
This month’s deposits × 12. A run-rate, not a forecast.
Where people fool themselves
Run rate from this month × 12 on a seasonal business is how people hire in December. Use it as a flashlight, not a plan.
Run it on your own numbers: any industry calculator.