CAC Payback

An intangible investment — R&D, brand-build, customer-acquisition with measurable payback, software development — that has been moved from operating expense to balance-sheet asset and amortised over its useful life under management accounting. Statutory accounting rarely permits the same treatment for internally-generated intangibles: IAS 38 imposes six conservatism criteria that are difficult to meet in practice; ASC 730 forces immediate expensing under US GAAP.

An analytical framework that decomposes economic or firm-level output growth into contributions from labour, capital, and a residual factor often interpreted as technological progress or total factor productivity. Growth accounting is fundamental to understanding how intangible investments — in R&D, software, organisational design, and human capital — drive productivity improvements.

A reconciliation document that maps founder-reported EBITDA to a Fund's maintainable EBITDA, identifying each adjustment per IPEV Section 3.4 with documented evidence. The bridge typically traces non-recurring spend, discontinued lines, one-time items, founder compensation normalisation, and pro-forma adjustments — each with source documentation (board minutes, contracts, payroll) and the known-and-knowable evidence flag.

The US GAAP standard requiring immediate expensing of research and development costs as incurred. ASC 730 is the structural source of the gap between statutory and capitalisation-reclassified EBITDA for US-headquartered companies: virtually no R&D is permitted on the balance sheet, regardless of stage, evidence quality, or commercial proximity.

An intangible asset created within the business (R&D output, brand, customer relationships, organisational know-how) rather than acquired through a transaction. IAS 38 conservatism rules make these difficult to capitalise on statutory books — six development-cost capitalisation criteria must all be met.

A measure of output that accounts for changes in the quality of goods and services produced, rather than simply measuring volume. Quality adjustment is essential for accurate productivity measurement, particularly in sectors where intangible investments drive improvements in product functionality, reliability, and user experience.

A goal-setting framework that defines qualitative objectives and pairs them with measurable key results. OKRs help growth businesses align teams around priorities and track progress against ambitious targets, from product development to revenue growth.

The percentage change in a metric from one year to the next, used to assess trends while neutralising seasonal effects. YoY growth rates in revenue, productivity, and intangible asset investment are fundamental to performance evaluation, valuation modelling, and growth accounting analysis.

What is Customer Lifetime Value (LTV)?

LTV is the total profit a company expects to generate from a customer relationship over its lifetime — calculated as (ARPU × Contribution Margin) / Monthly Churn.

What is the Solow Residual?

The Solow Residual is the portion of output growth that cannot be explained by growth in labour and capital inputs — it represents Total Factor Productivity growth, which is largely driven by intangible assets.

What is Total Factor Productivity (TFP)?

TFP measures the portion of output growth that cannot be explained by increases in labour or capital inputs — it captures the efficiency gains from innovation, technology, and better management.

How does Opagio's Productivity Calculator work?

The calculator uses growth accounting methodology to decompose your revenue and GVA growth into contributions from labour, capital, and Total Factor Productivity (TFP).