Revenue Run Rate is an indicator of financial performance that takes a company’s current revenue in a certain period (a week, month, quarter, etc.) and converts it to an annual figure to get the full-year equivalent. This metric is often used by rapidly growing companies, as data that’s even a few months old can understate the current size of the company. Another term for this is the Sales Run Rate.
In general, the run rate uses the current financial information, such as present sales and present revenue, to forecast performance. As it extrapolates the current financial information and performance there is an implied assumption that the present financial environment will not change significantly in the future.
Annual Revenue Run Rate Formula: Run Rate = Revenue in Period / # of Days in Period x 365