Quick Ratio is MRR gained (new + expansion) divided by MRR lost (churned + contraction).
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A SaaS Quick Ratio calculator compares the recurring revenue your business gains against the recurring revenue it loses in the same period, boiling growth efficiency down to a single number instead of just a top-line MRR trend.
SaaS Quick Ratio = (New MRR + Expansion MRR) / (Churned MRR + Contraction MRR). New MRR comes from brand-new customers, expansion MRR comes from existing customers upgrading or adding seats, churned MRR is revenue lost to cancellations, and contraction MRR is revenue lost to downgrades that fall short of a full cancellation. A company adding 8,000 dollars in new MRR and 3,000 in expansion MRR, while losing 2,000 to churn and 1,000 to contraction, has 11,000 dollars gained against 3,000 lost, for a Quick Ratio of about 3.67.
A Quick Ratio of 4 or above is a commonly cited benchmark for efficient, healthy growth, since it means roughly four dollars of MRR are coming in for every dollar going out. A ratio between 1 and 4 still shows net growth, just with a thinner margin over losses, which usually means either acquisition needs to accelerate or retention needs to improve. A ratio under 1 is a warning sign: revenue is shrinking even if new sales are still closing, because churn and contraction are outrunning them.
Total MRR can climb every month while masking a business that is quietly leaking customers, as long as new sales are large enough to cover the gap. The Quick Ratio strips that illusion away by isolating gained revenue from lost revenue, so a founder or investor can see whether growth is compounding on a retained customer base or constantly fighting churn just to stay flat. Tracking it monthly alongside net revenue retention gives a much fuller read on the health of a subscription business than MRR alone ever could.
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