SaaS Quick Ratio Calculator
Measure your growth efficiency
What is SaaS Quick Ratio?
The SaaS Quick Ratio measures growth efficiency by comparing how much revenue you are adding versus how much you are losing. It reveals whether your growth is sustainable or if high churn is masking underlying problems.
Key Terms
The ratio of revenue gained (new + expansion) to revenue lost (churn + contraction), measuring the overall efficiency of your growth.
Monthly recurring revenue from first-time customers who subscribed during the measurement period.
Additional monthly recurring revenue from existing customers who upgraded or expanded their subscriptions.
Monthly recurring revenue lost from customers who completely cancelled their subscriptions.
Monthly recurring revenue lost from existing customers who downgraded to a lower-priced plan without fully cancelling.
Formulas Used
A ratio above 4 is excellent, above 2 is good, above 1 means you are growing, and below 1 means you are shrinking.
Three simple steps
Enter your MRR components
Input your new MRR, expansion MRR, churned MRR, and contraction MRR for the period.
Calculate the ratio
The calculator divides revenue gains by revenue losses to produce your SaaS Quick Ratio.
Evaluate growth quality
See whether your growth is efficient and sustainable or overly dependent on new customer acquisition.
Built for founders like you
SaaS leadership teams
Monitor whether revenue growth is coming from healthy sources or masking retention problems.
Investor due diligence
Demonstrate growth quality by showing strong quick ratio alongside top-line MRR growth.
Retention strategy
Identify whether churn or contraction is the bigger drag on your growth efficiency.
What the SaaS Quick Ratio tells you
The SaaS Quick Ratio measures growth efficiency by comparing revenue gained to revenue lost. The formula is: (New MRR + Expansion MRR) / (Churned MRR + Contraction MRR). A higher ratio means you are adding revenue much faster than you are losing it.
Mamoon Hamid of Kleiner Perkins popularized a benchmark of 4:1 as the mark of a healthy SaaS company. This means for every dollar lost, four dollars are gained. Companies below 1:1 are shrinking, and those between 1:1 and 2:1 are growing but struggling with retention.
The quick ratio is especially useful because raw MRR growth can be misleading. A company growing MRR by 10% monthly might look healthy, but if that growth depends entirely on new sales while churning 8% of existing revenue, the underlying business is fragile.
Common questions
What is a good SaaS Quick Ratio?+
How is this different from net MRR growth?+
How do I improve my quick ratio?+
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