The pipeline is 3× target. The forecast misses anyway.

Coverage ratios feel like reassurance. They only work if the pipeline behaves like the one the ratio was calculated from, and most don't.

By Steve 5 min read
Abstract bridge artwork for The pipeline is 3× target. The forecast misses anyway.

A sales leader reports £3m of open pipeline against a £1m quarterly target and calls it three times coverage. The board relaxes. The quarter closes at £780k. Nobody lied, nothing unusual happened, and the same conversation will happen again in ninety days with the same arithmetic and the same shortfall. Coverage ratios are not wrong. They are conditional, and the conditions are almost never stated out loud. Understanding which condition has broken is usually more useful than adding more pipeline. What a coverage ratio quietly assumes Three times coverage is…

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Important: General information only. Rialto Bridge articles describe patterns and considerations that may apply to a business; they are not financial, legal, tax or accounting advice, and they take no account of your particular circumstances. Consider your own situation and seek advice from a qualified professional before acting.

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