A quick ratio of 4.7 is healthy: you are adding about $4.70 of new and expansion revenue for every $1 lost to churn and contraction. This is the SaaS growth quick ratio, not the accounting liquidity quick ratio.
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The SaaS quick ratio measures how efficiently you grow. It divides the revenue you added in a period by the revenue you lost in the same period. The formula is (new MRR plus expansion MRR) divided by (churned MRR plus contraction MRR). A ratio of 4 means you added $4 for every $1 you lost. The calculator above runs this math live from your own numbers.
Coined by Social Capital's Mamoon Hamid, the SaaS quick ratio is a growth-efficiency metric built from four MRR movements. The numerator is what you gained: new MRR from fresh customers plus expansion MRR from existing customers buying more. The denominator is what you lost: churned MRR from cancellations plus contraction MRR from downgrades. Divide the two and you get a single number that tells you how much of your gross growth actually sticks.
One important note: this is not the accounting quick ratio. The accounting version is a liquidity test, current assets minus inventory divided by current liabilities, and it tells you whether a business can cover its short-term bills. They share a name and nothing else. This tool computes the SaaS growth quick ratio that operators and investors use to judge revenue durability.
The widely cited benchmark is around 4 or higher for a healthy, efficient SaaS business. At 4 you are adding $4 of new and expansion revenue for every $1 you lose, which leaves plenty of room for durable growth. A ratio below 1 means you are shrinking: losses outpace adds. Between 1 and 4 you are growing, but you are spending hard to refill a leaky bucket, and a lot of your gross adds never reach the bank. The exact target shifts by stage and motion, but 4 is the number most teams aim to beat.
You move the ratio two ways: lift the numerator or shrink the denominator. To lift it, grow new MRR with more qualified pipeline and a tighter conversion funnel, and grow expansion MRR with upsells, seat growth and usage-based pricing that rewards success. To shrink the denominator, attack churned and contraction MRR by fixing onboarding, closing support gaps and aligning pricing with the value customers actually get. Cutting churn usually moves the ratio fastest, because shrinking the denominator has an outsized effect on a division. If organic search is your acquisition channel, a steady flow of qualified, intent-driven traffic feeds the new-MRR side of this ratio, which is exactly where SEO earns its keep.
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