Enter backlog and revenue pace
How it is calculated
Backlog months = backlog amount ÷ average monthly revenue. Coverage ratio = backlog months ÷ coverage target. Backlog should reflect the definition your firm uses, such as signed work expected to be performed, and revenue pace should use a consistent basis.
This simple ratio does not account for cancellations, timing, labor capacity, project profitability, or revenue recognition. General education only, not engineering, legal, tax, or investment advice. Licensed PE judgment and local codes govern engineering work.
Example scenario
A hypothetical civil engineering firm owner enters $3,000,000 in backlog, $500,000 in average monthly revenue, and a 6 month coverage target. The calculator reports 6 months of backlog coverage and 100% of target. These inputs are hypothetical planning assumptions, not a benchmark for a healthy backlog or a promise of future revenue. The result can help the owner discuss whether booked work appears to cover the chosen planning horizon and whether staffing or business development plans need review. Before making a capacity decision, check which backlog is signed and likely to proceed, when work is scheduled, and whether the firm has staff available to deliver it. Also consider project profitability, cancellations, and revenue recognition. The ratio is a simple coverage view, so compare it with the project schedule and cash planning before using it in a budget.
Method, inputs and limits
Purpose
Convert backlog into months of revenue coverage and compare it with a user-entered target.
Inputs and defaults
Backlog: $6,000,000; average monthly revenue: $500,000; coverage target: 12 months. Backlog and revenue are nonnegative; target must be above zero.
Formulas
Backlog months = backlog ÷ monthly revenue. Coverage percent = backlog months ÷ target months × 100%. Coverage is unavailable when monthly revenue is zero.
Outputs
Estimated months of coverage and percent of target.
Test cases, expected values
- Defaults: 12 months; 100% of target.
- $3,000,000 backlog, $500,000 monthly revenue, 6 month target: 6 months; 100% of target.
- $0 backlog, $500,000 monthly revenue, 12 month target: 0 months; 0% of target.
Disclaimer
Simple ratio only. Does not account for cancellations, timing, capacity, profitability, or revenue recognition. General education only, not engineering, legal, tax, or investment advice.
