Profitability Metrics These are the stages of profitability every founder should be familiar with (Refer the table below) In the beginning, Start with Contribution margin (CM)- measure if your revenue covers variable costs. Next, target transaction-level profitability (revenue exceeding variable costs per transaction). Then, shift your focus towards achieving a positive EBITDA (Operating Profit before deducting Interest and Non cash expenses) Ultimately, as growth happens, you achieve a net profit where you cover your non operating expenses as well. Where do you stand currently? Also, share any additional insight you would like to offer.
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