Free tool
SaaS Quick Ratio Calculator
Measure your revenue growth efficiency. Enter your MRR changes to see if your growth outpaces churn.
Measure your revenue growth efficiency. Enter your MRR changes to see if your growth outpaces churn.
Enter your monthly recurring revenue changes
MRR from new customers this month
MRR gained from upgrades and upsells
MRR lost from cancelled customers
MRR lost from downgrades
SaaS quick ratio
3.50
Good
Revenue growth means nothing if you are losing customers just as fast. The quick ratio reveals whether your growth is sustainable.
VCs use the quick ratio to assess SaaS health. A ratio above 4 signals strong product-market fit and efficient growth.
A low quick ratio tells you to focus on retention before acquisition. Fix the leaky bucket before pouring more water in.
The SaaS quick ratio measures revenue growth efficiency by comparing MRR gained (new + expansion) to MRR lost (churn + contraction). A ratio of 4 or higher is considered excellent. The formula is: (New MRR + Expansion MRR) / (Churned MRR + Contraction MRR).
A quick ratio above 4 is excellent and typical of top-performing SaaS companies. Between 2 and 4 indicates healthy growth. Between 1 and 2 means slow growth. Below 1 means your business is shrinking, as you are losing more revenue than you are gaining.
The SaaS quick ratio is a subscription revenue metric that measures MRR growth efficiency. The accounting quick ratio (or acid-test ratio) measures short-term liquidity by comparing liquid assets to current liabilities. They share a name but measure completely different things.
You can improve your quick ratio by either increasing the numerator (acquire more customers, improve upsell/expansion motions) or decreasing the denominator (reduce churn through better onboarding, customer success, and product improvements). Reducing churn typically has a bigger impact than acquiring new customers.