%% date:: [[2022-08-29]] %% # [[Capital Efficiency]] Capital Efficiency is a measure that combines the growth rate and the profit margin of a company. [[The Rule of 40]] is often used to judge the profitability of [[SaaS]] companies. According to this rule, a company with a capital efficiency of 40 or higher is generating profit at a rate that's sustainable. [^cloudzero] [^cloudzero]: CloudZero. (2022). *What is the rule of 40 for SaaS? Here's how to calculate it.* Retrieved from [cloudzero.com](https://www.cloudzero.com/blog/rule-of-40)