Business Intelligence 101: Building Real-Time Executive Dashboards That Drive Action

export interface ExecutiveKPIMetrics {
  mrrUsd: number;
  cacUsd: number;
  ltvUsd: number;
  ltvToCacRatio: number;
}

export function calculateExecutiveMetrics(
  totalMonthlyRevenue: number,
  marketingSpend: number,
  newCustomersAcquired: number,
  averageCustomerLifespanMonths: number
): ExecutiveKPIMetrics {
  // 1. Calculate Customer Acquisition Cost (CAC)
  const cacUsd = newCustomersAcquired > 0 ? marketingSpend / newCustomersAcquired : 0;

  // 2. Calculate Lifetime Value (LTV)
  const arpu = newCustomersAcquired > 0 ? totalMonthlyRevenue / newCustomersAcquired : 0;
  const ltvUsd = arpu * averageCustomerLifespanMonths;

  // 3. Compute LTV:CAC Efficiency Ratio (Target Healthy Ratio: > 3.0x)
  const ltvToCacRatio = cacUsd > 0 ? ltvUsd / cacUsd : 0;

  return {
    mrrUsd: totalMonthlyRevenue,
    cacUsd: Math.round(cacUsd),
    ltvUsd: Math.round(ltvUsd),
    ltvToCacRatio: Number(ltvToCacRatio.toFixed(2)),
  };
}