SaaS Quick Ratio Calculator
Calculate your SaaS Quick Ratio. Measure growth efficiency by comparing new and expansion MRR added against churned and contracted MRR lost.
Calculated Results
SaaS Quick Ratio
5x
Growth MRR (In)
$8,000
Lost MRR (Out)
$1,600
Health status: Excellent (A common rule of thumb is 4.0x or higher.).
About this tool
The SaaS Quick Ratio—popularized by venture capitalist Mamoon Hamid—measures a subscription company's ability to generate recurring revenue relative to its revenue degradation. It compares total positive MRR movements (new customer bookings plus expansion upgrades) directly against total negative MRR movements (cancellations plus plan contractions). A Quick Ratio of 1.0 means your business is running in place: every dollar of new and expansion revenue is instantly erased by churn and contraction. A Quick Ratio of 4.0 or higher is considered world-class, demonstrating that your product adds $4 of recurring revenue for every $1 lost. Use this calculator to evaluate whether your current growth trajectory is sustainable or masking excessive underlying customer leakage.
How It Works
- 1Input New MRR added from brand new customers during the month.
- 2Input Expansion MRR from upgrades and add-ons from existing customers.
- 3Input Churned MRR from cancelled accounts.
- 4Input Contraction MRR from account downgrades.
- 5Inspect your calculated Quick Ratio and business health assessment.
Formula & Math
Transparent LogicQuick Ratio = (New MRR + Expansion MRR) / (Churned MRR + Contraction MRR)
Worked Practical Example
A SaaS adds $8,000 in New MRR and $2,000 in Expansion MRR. In the same month, it loses $1,500 to churn and $500 to contraction.
Calculation / Steps
($8,000 + $2,000) / ($1,500 + $500) = $10,000 / $2,000 = 5.00
Expected Result
Quick Ratio of 5.00 (Excellent efficiency; top-tier SaaS health).
Frequently Asked Questions
What is an acceptable SaaS Quick Ratio for early-stage startups?+
A Quick Ratio above 2.0 indicates healthy growth. Above 4.0 is outstanding. A ratio below 1.5 indicates that churn is severely throttling expansion.
How does the SaaS Quick Ratio differ from the accounting quick ratio?+
The standard financial quick ratio compares liquid assets to short-term liabilities. The SaaS Quick Ratio measures the velocity of incoming versus outgoing recurring revenue.
How can I improve my SaaS Quick Ratio?+
You can improve it by increasing expansion revenue from active users and aggressively reducing churn through cancellation interception.
Automate retention on your cancel button
BoolBul directly suppresses the denominator of your Quick Ratio by preventing cancellations, dramatically lifting your overall growth efficiency score.
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