# How To Calculate ARR Cohort Analysis in Sage 50 | Arithmix

Learn how to effectively calculate ARR Cohort Analysis in Sage 50 with our step-by-step guide. Improve your financial analysis skills and make informed decisions for your business. Start optimizing your revenue today.

If you're looking for a way to analyze your company's revenue trends, you may want to consider calculating ARR cohort analysis. This type of analysis can help you identify patterns in your customer base and track how much revenue they generate over time. In this article, we'll explain what ARR cohort analysis is, when it's valuable to calculate, and how you can do it using Sage 50.

## What Is ARR Cohort Analysis?

ARR stands for Annual Recurring Revenue, which is the amount of revenue that a company expects to receive on an annual basis from its customers. Cohort analysis, on the other hand, is a way of grouping customers based on common characteristics, such as the month they signed up or the product they purchased.

ARR cohort analysis combines these two concepts to help companies understand how much revenue they can expect to receive from each cohort of customers over time. By tracking the revenue generated by each cohort, companies can identify trends and make informed decisions about how to allocate resources.

## When Is It Valuable To Calculate ARR Cohort Analysis?

ARR cohort analysis can be valuable for any company that relies on recurring revenue from customers. This includes subscription-based businesses, software-as-a-service (SaaS) companies, and any other business that charges customers on a recurring basis.

By calculating ARR cohort analysis, companies can identify which cohorts of customers are generating the most revenue, which are growing the fastest, and which may need additional attention to prevent churn. This information can be used to inform marketing and sales strategies, as well as product development decisions.

## How to Calculate ARR Cohort Analysis in Sage 50

To calculate ARR cohort analysis in Sage 50, you'll need to follow these steps:

1. Identify the cohorts you want to analyze. This could be based on the month the customer signed up, the product they purchased, or any other characteristic that's relevant to your business.
2. Calculate the ARR for each cohort. To do this, add up the total revenue generated by each cohort over the past year and divide by the number of customers in that cohort.
3. Plot the ARR for each cohort over time. You can use a line graph to visualize the trends and identify any patterns or anomalies.
4. Analyze the data to identify trends and make informed decisions about how to allocate resources.

By following these steps, you can gain valuable insights into your company's revenue trends and make informed decisions about how to grow your business.

## How Do You Calculate ARR Cohort Analysis in Sage 50

Sage 50 itself isn’t naturally geared towards letting you calculate complex metrics like ARR Cohort Analysis. As an alternative, teams typically use products like Arithmix to import data from Sage 50 and build out dashboards.

## What is Arithmix?

Arithmix is the next generation spreadsheet - a collaborative, web-based platform for working with numbers that’s powerful yet easy to use. With Arithmix you can import data from systems like Sage 50, combine it with data from other systems, and create calculations like ARR Cohort Analysis.

In Arithmix, data is organized into Tables and referenced by name, not by cell location like a spreadsheet, simplifying calculation creation. Data and calculations can be shared with others and re-used like building blocks, vastly streamlining analysis, model building, and reporting in a highly scalable and easy to maintain platform. Data can be edited, categorized (by dimensions) and freely pivoted. Calculations are automatically copied across a dimension - eliminating copy and paste of formulas.