How to calculate Rule of 40
The Rule of 40 formula, with plain worked examples you can check yourself.
Rule of 40 = g + m
The result is a percentage (%).
Worked examples
g = 50% · m = 5%Rule of 40 = 55%
g = 20% · m = 25%Rule of 40 = 45%
g = 15% · m = 15%Rule of 40 = 30%
How to use it
- Write down the values for each letter in the formula.
- Do the brackets first, then divide or multiply.
- Check the units before you compare results.
- Compare the answer with last period or with a competitor to see if it is good or bad.
This formula belongs to Funding & Growth.
Related terms
Practice Rule of 40 with real numbers
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