Business Health Score Explained
How Varsal's health score works and what each component measures.
What Is the Health Score?
The Varsal Health Score is a composite metric (0–100) that synthesizes your key business indicators into a single number. It answers the question: "how healthy is my business right now?"
The score is weighted across five dimensions: Growth, Retention, Unit Economics, Cash, and Engagement. Each dimension is scored independently and combined into the overall health score.
Track this metric live in your dashboard →Growth (25% Weight)
Measures your MRR growth rate, new customer acquisition, and revenue momentum. High growth scores come from consistent month-over-month MRR increases and healthy new customer rates.
A perfect growth score requires sustained double-digit monthly MRR growth. The score penalizes declining or flat growth, even if absolute numbers are high.
Retention (25% Weight)
Evaluates churn rate, net revenue retention, and customer retention curves. This dimension rewards low churn and high NRR — the hallmarks of strong product-market fit.
Net revenue retention above 100% (meaning expansion outpaces churn) is the single biggest contributor to a high retention score.
Unit Economics (20% Weight)
Assesses LTV:CAC ratio, CAC payback period, and gross margin. Strong unit economics indicate a sustainable, scalable business model.
This dimension rewards capital efficiency — generating maximum revenue from minimum acquisition spend.
Cash (15% Weight)
Monitors cash runway, burn rate trends, and revenue vs. burn ratio. This dimension ensures your business can survive long enough to realize its growth potential.
18+ months of runway with declining burn rate earns the highest scores. Below 6 months of runway significantly drags down the overall health score.
Engagement (15% Weight)
Tracks DAU/MAU ratio, session frequency, and feature adoption. Engagement is a leading indicator — it predicts future retention and growth.
Products with high daily engagement scores consistently outperform on retention and expansion revenue over the following months.
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