How To Calculate Magic Number in Acumatica | Arithmix

Calculating the magic number in Acumatica is a simple process that can help you understand the health of your business. By understanding your magic number, you can make informed decisions about your company's growth and profitability. In this article, we'll explain what the magic number is, when it's valuable to calculate it, and how to calculate it.

What Is Magic Number?

The magic number is a metric that helps you understand the relationship between your revenue growth and your customer acquisition costs. It's calculated by dividing your monthly recurring revenue (MRR) by your customer acquisition cost (CAC). The result is a ratio that tells you how many months it takes for a new customer to pay back the cost of acquiring them. A higher magic number means that your business is more profitable, while a lower magic number means that you're spending more money to acquire customers than you're making from them.

For example, if your MRR is $10,000 and your CAC is $2,000, your magic number is 5. This means that it takes five months for a new customer to pay back the cost of acquiring them. If your MRR is $20,000 and your CAC is still $2,000, your magic number is now 10, which means that your business is more profitable.

When Is It Valuable To Calculate Magic Number?

The magic number is valuable to calculate when you're trying to understand the health of your business. It can help you determine if you're spending too much money on customer acquisition or if you need to focus on increasing your revenue. Additionally, the magic number can help you make informed decisions about your business's growth and profitability. If your magic number is low, you may need to adjust your pricing or marketing strategy to increase your revenue. If your magic number is high, you may be able to invest more in customer acquisition to grow your business.

How To Calculate Magic Number

Calculating the magic number is a simple process. First, you need to determine your monthly recurring revenue (MRR). This is the amount of revenue that you generate each month from your recurring customers. Next, you need to determine your customer acquisition cost (CAC). This is the amount of money that you spend to acquire a new customer. Finally, you divide your MRR by your CAC to get your magic number.

Here's the formula:

Magic Number = Monthly Recurring Revenue / Customer Acquisition Cost

Once you've calculated your magic number, you can use it to make informed decisions about your business's growth and profitability. Remember, a higher magic number means that your business is more profitable, while a lower magic number means that you're spending more money to acquire customers than you're making from them.

In conclusion, calculating the magic number in Acumatica is a simple process that can help you understand the health of your business. By understanding your magic number, you can make informed decisions about your company's growth and profitability. Use the formula we've provided to calculate your magic number and start making data-driven decisions today.

How Do You Calculate Magic Number in Acumatica

Acumatica itself isn’t naturally geared towards letting you calculate complex metrics like Magic Number. As an alternative, teams typically use products like Arithmix to import data from Acumatica 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 Acumatica, combine it with data from other systems, and create calculations like Magic Number.

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.

Arithmix is fully collaborative, giving your entire team access to your numbers and the ability to work together seamlessly.

Calculating Magic Number in Arithmix

Calculating metrics like Magic Number is simple in Arithmix. Once you've created your free account, you’ll be able to import your Acumatica data, and use it to create natural language formulas for metrics like Magic Number.

Arithmix is designed to give you the power to build any calculations you want on top of your Acumatica data, while also being easy to use and collaborate on. You can share your dashboards with users inside and outside of your organisation, making it easy to empower your whole team.