Part II: Visualizing the Core Ratio – The Realized Core Ratio

  • August 5, 2018

This is the chart we at e.ventures use to visualize the Core Ratio, the efficiency of a company’s economic engine. We call this chart the “Realized Core Ratio”. The Realized Core Ratio is simple to calculate and makes no guesses about the future.

We standardize this chart to always look at the Realized Core Ratio on a scale from 0–6 over 36 months of cohort data. When the cohorts cross the line at 1.0 they have achieved payback. We also look at the slopes of the individual lines to gauge the retention rate.

‘Vertically slicing’ this Realized Core Ratio chart, we can look at trends over time and answer questions such as, ‘Has our Core Ratio after 4 months become better or worse for recent cohorts?’.

Screen Shot 2018-07-30 at 1.53.29 AM


 

Written by: Thomas Gieselmann and Jonas Nelle

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