What Is Quick Ratio (SaaS)?
The ratio of revenue added to revenue lost — measures growth efficiency.
The ratio of revenue added to revenue lost — measures growth efficiency.
The SaaS Quick Ratio measures revenue growth efficiency by dividing total revenue gains (new + expansion MRR) by total revenue losses (churn + contraction MRR). A higher ratio indicates healthier, more efficient growth.
A quick ratio of 4 or higher is considered excellent — for every $1 lost, you're adding $4. A ratio below 1 means you're losing more revenue than you're gaining, which is unsustainable.
The quick ratio is useful because it captures the quality of growth. A company adding $100K in new MRR but losing $80K to churn has a very different trajectory than one adding $100K and losing only $20K.
Formula
Quick Ratio = (New MRR + Expansion MRR) ÷ (Churned MRR + Contraction MRR)
Example
($30K new + $10K expansion) ÷ ($5K churn + $3K contraction) = Quick Ratio of 5.0.
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