# What is Annual Run Rate (ARR)?

Run Rate is an estimation of company’s future financial performance based on current data. It’s basically taking current performance and extending it over future periods.

## Calculating Annual Run Rate (ARR):

Company earns 5.000.000\$ in a month

$5.000.000&space;x&space;12&space;=&space;60.000.000&space;(ARR)$

It might not be a very accurate metric for seasonal businesses.