Welcome to another episode of "Today I Learned" by the Emanda team, where we simplify complex M&A jargon into everyday terms!

In this episode, Emily Grinton explains the Rule of 40, a key metric used to assess a company's value based on profit and growth. The Rule of 40 is simple: add your profit margin percentage to your growth margin percentage, and if that number hits or exceeds 40, you're in a great position.

Meeting the Rule of 40 is a strong signal to potential buyers that your business is thriving, whether you have high profits and low growth or high growth and low profits.

Have questions or M&A terms you'd like us to cover? Let us know in the comments! Curious about your company's worth? Head to the Emanda app to get started!

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