SaaS Quick Ratio
A measure of growth efficiency comparing new + expansion MRR to lost MRR from churn and contraction.
What it means
The SaaS Quick Ratio divides your revenue gains (new MRR + expansion MRR) by your revenue losses (churned MRR + contraction MRR). A Quick Ratio of 4 means you're adding $4 of new revenue for every $1 lost. It's one of the clearest indicators of growth quality - are you growing efficiently, or are you just running on a treadmill filling a leaky bucket?
Formula
Quick Ratio = (New MRR + Expansion MRR) ÷ (Churned MRR + Contraction MRR)
Why it matters
A Quick Ratio above 4 is excellent, 2-4 is healthy, and below 1 means you're shrinking. Unlike MRR growth rate alone, Quick Ratio reveals the quality of your growth. A company growing MRR 10%/month with a Quick Ratio of 1.5 is in a much more precarious position than one growing 5%/month with a Quick Ratio of 6.
What is the SaaS Quick Ratio?
It's a growth efficiency metric: (New MRR + Expansion MRR) divided by (Churned MRR + Contraction MRR). Higher is better - it shows you're adding revenue much faster than you're losing it.
What is a good SaaS Quick Ratio?
Above 4 is excellent, 2-4 is healthy growth, and below 2 signals you have a churn problem that needs attention.
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