Question
A private equity analyst is examining the financials of a SaaS company, SecureNet, specializing in cybersecurity solutions for large enterprises. SecureNet primarily sells long-term enterprise
A private equity analyst is examining the financials of a SaaS company, SecureNet, specializing in cybersecurity solutions for large enterprises. SecureNet primarily sells long-term enterprise contracts. In 2023, SecureNet secured the following enterprise contracts:
- Contract A: A 3-year contract valued at $1.8 million, signed in January 2023.
- Contract B: A 2-year contract valued at $1.2 million, signed in July 2023.
- Contract C: A 4-year contract valued at $2.4 million, scheduled to start in February 2024.
The analyst is tasked with calculating the Annual Recurring Revenue (ARR) for SecureNet at the end of 2023.
Assuming that there are no other active contracts than those described above, calculate the correct ARR for SecureNet at the end of 2023?
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Valuation The Art and Science of Corporate Investment Decisions
Authors: Sheridan Titman, John D. Martin
3rd edition
133479528, 978-0133479522
