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Unit Economics Analysis

Evaluate unit economics for SaaS and recurring revenue diligence.

1|Updated May 16, 2026
Search Tags:#unit economics#revenue quality#ltv cac#net retention#margin waterfall#arr cohorts#pe diligence
One-click install
npx skills add https://github.com/executiveusa/Cheggie-trade-V2 --skill unit-economics-analysis-executiveusa
Or copy as Structured Prompt for Agent▼
Please help me install this Agent Skill.
Skill: Unit Economics Analysis
Source: https://github.com/executiveusa/Cheggie-trade-V2/tree/main/core/financial-skills/plugins/vertical-plugins/private-equity/skills/unit-economics
Command: npx skills add https://github.com/executiveusa/Cheggie-trade-V2 --skill unit-economics-analysis-executiveusa

SYSTEM DOCUMENTATION & REQUIREMENTS

What problem does it solve?

Unit Economics Analysis helps investors evaluate whether a target’s revenue is high-quality and scalable by quantifying retention, acquisition economics, cohort performance, payback, and profitability drivers.

Core Features & Use Cases

  • ARR and revenue quality diagnostics: builds an ARR bridge, runs cohort (vintage) analysis, checks customer concentration, and separates recurring vs. non-recurring revenue to assess durability.
  • Customer economics modeling: calculates CAC, estimates LTV, derives LTV:CAC, computes CAC payback, and supports segmented economics for enterprise/SMB/mid-market.
  • Retention, expansion, and margin waterfall: measures gross vs. net retention (NDR), expansion rate, logo vs. dollar churn, and converts revenue into a margin waterfall to connect economics to profitability.
  • Use Case: During PE diligence, you can assess whether an SaaS subscription business shows healthy cohort retention, strong NDR, manageable payback periods, and margin progression before committing to an investment.

Quick Start

Use the Unit Economics Analysis skill to analyze a PE target’s ARR cohorts, LTV:CAC, net retention, CAC payback, revenue quality, and margin waterfall, then summarize key diligence red flags and benchmark gaps.

Frequently Asked Questions about Unit Economics Analysis

High-intent search queries and answers about installing and using this skill.

FAQPage Schema
How do I calculate LTV:CAC and CAC payback for SaaS PE diligence?▼

To calculate LTV:CAC and CAC payback during SaaS PE diligence, you must quantify customer acquisition costs, estimate lifetime value, and measure the time required to recover acquisition investments. This process evaluates the scalability of customer acquisition economics.

What is the best way to analyze ARR cohorts and net dollar retention for recurring revenue?▼

Analyzing ARR cohorts and net dollar retention involves building ARR bridges and running vintage cohort analysis to measure expansion rate, logo vs. dollar churn, and gross vs. net retention. This separates recurring revenue from services to assess revenue durability.

How do I build a margin waterfall to connect unit economics to profitability?▼

Building a margin waterfall decomposes revenue into profitability drivers by converting cohort performance and retention metrics into progressive margin deductions. This connects customer acquisition economics directly to target scalability and overall profitability.

Can I separate recurring vs. non-recurring revenue for target benchmark scoring?▼

Yes, you can separate recurring vs. non-recurring revenue to enforce accurate revenue-type classification. This separation supports reliable benchmark scoring, produces a revenue quality score with red flags, and ensures accurate PE diligence diagnostics.

Why does customer concentration affect revenue quality diagnostics in PE targets?▼

Customer concentration affects revenue quality diagnostics because high concentration undermines the durability of recurring revenue. Evaluating concentration alongside indexed cohort matrices and net retention helps identify structural risks before committing to an investment.

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