Startup Metrics

Contribution Margin

Definition

What is Contribution Margin?

Revenue minus variable costs, expressed in amount or percentage.

Example in practice

A ₦5,000 sale with ₦3,000 variable cost has ₦2,000 contribution margin.

Keep learning

The rate at which a company spends cash, commonly measured monthly.

The estimated time before cash runs out at the current burn rate.

Recurring subscription revenue normalised to one month.

Money set aside rather than spent, often for emergencies or future goals.

Think you know your investing terms?

Put your knowledge to the test with a quick quiz.