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Rule of 78 (Modified)
BUSINESS BASICS SERIES
By Dan Cavalli

This spread sheet is specifically designed to show the revenues for a telecommunications business. However it can be related to any other business that has a recurring monthly bill for services rendered to the consumer.

By Dan Cavalli

Month 1 2 3 4 5 6 7 8 9 10 11 12
1 1 1 1 1 1 1 1 1 1 1000 1000 1000
2   1 1 1 1 1 1 1 1 1000 1000 1000
3     1 1 1 1 1 1 1 1000 1000 1000
4       1 1 1 1 1 1 1000 1000 1000
5         1 1 1 1 1 1000 1000 1000
6           1 1 1 1 1000 1000 1000
7             1 1 1 1000 1000 1000
8               1 1 1000 1000 1000
9                 1 1000 1000 1000
10                   1000 1000 1000
11                     1000 1000
12                       1000
Total 1 2 3 4 5 6 7 8 9 1000 11000 12000
                      Total 78000

This shows the power of having a product that repeats itself each month while the customer buys from you regularly. Column one, row one represents the revenue generated in month one from sales made. Column two row one depicts the next month’s revenue.

Dan Cavalli
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