Promissory Note
Definition
A written promise by one party to pay a definite sum to another on demand or at a specified date. Unlike a bill of exchange it is made by the payer rather than ordering a third party to pay.
Related Terms in Business Terms
MRR (Monthly Recurring Revenue)
The predictable revenue a subscription business earns each month. Calculated by multiplying the number of paying customers by the average revenue per user (ARPU). Key SaaS metric.
ARR (Annual Recurring Revenue)
The annualized version of MRR (MRR x 12). Used by SaaS companies to measure predictable yearly revenue. A key metric for valuation and growth tracking.
Burn Rate
The rate at which a company spends cash, typically measured monthly. Gross burn is total monthly spending. Net burn is spending minus revenue. Used to calculate runway (cash / net burn = months of runway).
Working Capital
Current assets minus current liabilities. Measures a business's ability to pay short-term obligations. Positive working capital means the business can cover its near-term debts.
Stop memorising terms — let HelloBooks do the work
AI-assisted bookkeeping that handles invoicing, GST, reconciliations, and reports automatically. Free to start.