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Rule of 40 calculator
Add revenue growth to profit margin — the headline test for whether you're balancing growth and efficiency the way investors expect.
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Use a negative number if you're burning.
Rule of 40 score
45%
- Growth contribution60%
- Margin contribution-15%
- Headroom above 40+5 pts
You clear the Rule of 40
Your blend of growth and profitability is in the range investors reward.
Benchmark 40% or higher passes
Why it matters
Growth rate plus profit margin should clear 40%. It's the quickest read on whether you're trading growth and efficiency sensibly — burn hard if you're growing fast, tighten up if you're not.
Stop recalculating by hand
Radley Finance keeps this metric — and every other — live from one model, with the same benchmarks built in. Investor-ready in under an hour.
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