SaaS & growth
SaaS Quick Ratio
Formula reviewed by Tahir Asif, CMA
New and expansion MRR divided by lost MRR — how much growth a company generates per dollar it loses.
The SaaS quick ratio (not to be confused with the balance-sheet liquidity ratio of the same name) compares MRR gained — from new customers and expansion — against MRR lost to churn and contraction. A ratio of 4 means $4 gained for every $1 lost.
A ratio above roughly 4 is often read as healthy, though — like most SaaS benchmarks — the right target depends heavily on company stage and how the business defines expansion revenue.
Quick ratio
(New MRR + Expansion MRR) ÷ (Contraction MRR + Churned MRR)
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