From four quarters of Tessavik Cloud's numbers, compute the latest magic number, CAC payback and burn multiple, and say which is weakest.

The latest magic number is 0.78, CAC payback is about 21 months and the burn multiple is 1.61; the burn multiple is the weak one. Revenue rose Rs 1.4 crore in the quarter, Rs 5.6 crore of new ARR, on Rs 7.2 crore of prior-quarter sales spend. Both sales measures sit in bands most investors read as acceptable. The burn multiple says the company loses Rs 1.61 for every rupee of ARR it adds, because Rs 11.7 crore a quarter of R&D and G&A sits outside the sales engine.

Think of a tea stall that spends Rs 1,000 on flyers in March and sees sales rise Rs 200 a month from April. The flyer question is how much new monthly sales each rupee of flyers bought; the stall question is how much the whole stall loses while it grows. Magic number and CAC payback are flyer questions, about the sales and marketing rupee alone; burn multiple is the stall question, about every rupee lost against the ARR gained. That is why three readings can disagree about the same company. The magic numberAnnualised new revenue in a quarter divided by the sales and marketing spend of the previous quarter; a reading of how much ARR each sales rupee bought. uses the prior quarter's spend because the spend comes before the revenue it produces.

Revenue grew from Rs 12.6 crore to Rs 14.0 crore in the latest quarter, Rs 1.4 crore, which annualised is Rs 5.6 crore of new ARR. Magic number is Rs 5.6 crore over the prior quarter's Rs 7.2 crore of sales spend, 0.78; payback is Rs 7.2 crore over the Rs 4.2 crore of annual gross profit that ARR earns, 1.71 years or 20.6 months; burn multiple is Rs 9 crore over Rs 5.6 crore, 1.61. The earlier quarters read 0.80 and 0.86 on magic number, 20 and 19 months on payback, and 1.88 and 1.61 on burn multiple, so the sales measures are steady and the burn multiple has improved only because new ARR grew while burn stayed flat.

Because of what it includes. Gross profit in the latest quarter is 75% of Rs 14.0 crore, Rs 10.5 crore; a burn of Rs 9 crore means total operating cost of Rs 19.5 crore, of which sales is Rs 7.8 crore and the other Rs 11.7 crore is engineering, product and overhead. Tessavik burns Rs 36 crore a year to add about Rs 22.4 crore of ARR, and the sales measures cannot see the Rs 11.7 crore a quarter that makes that ratio 1.61. A multiple of 1 at today's burn would need Rs 9.0 crore of new ARR a quarter, 61% more than now; at today's new ARR it would need burn of Rs 5.6 crore, Rs 3.4 crore a quarter less. With, for illustration, Rs 60 crore of cash, runway is about 6.7 quarters, which is the number the partner will ask next.

That the sales engine is working and the company around it is expensive. Magic number of 0.78 and payback of 21 months say each sales rupee is earning its keep; a burn multiple of 1.61 says the company as a whole is paying Rs 1.61 for each rupee of ARR, and the fix lives in R&D and overhead, not in sales. The questions to take back are whether the Rs 11.7 crore of non-sales cost is building something that lifts gross margin or retention, and whether the magic number's slight drift from 0.86 to 0.78 is noise or the first sign of a saturating channel. The limitation: all three measures use revenue growth as a proxy for new ARR, which mixes new logos, expansion and churn, and a quarter's revenue gain can lag a sale by weeks. The bands are reading conventions that vary by firm and stage, and payback of 21 months is normal for an enterprise product and poor for a self-serve one.