Definition
Run rate is a financial metric that projects future revenue or expenses based on current performance, typically annualized for forecasting purposes.
Related Services
Run rate is commonly used in financial modeling, business valuation, and investor reporting to estimate long-term financial performance.
Problem and Application
While run rate provides insight into potential growth, it does not account for seasonal variations, market changes, or unexpected disruptions, which may lead to inaccurate projections if not adjusted accordingly.
Conclusion
Run rate is a useful tool for financial planning, but businesses should complement it with more comprehensive forecasting models to ensure reliability.
