Formula
quick ratio = (new MRR + expansion MRR) / (churned MRR + contraction MRR)
SaaS quick ratio
The SaaS quick ratio compares the recurring revenue a company gained in a period against what it lost, so it measures growth efficiency net of the leak.
Worked example
Adding €16,000 of new and €4,000 of expansion MRR while losing €5,000 to churn and contraction is a quick ratio of 4: four euros gained for every euro that leaked.
Benchmark
Mamoon Hamid, who introduced the metric in 2015, set 4 as the bar for a healthy early-stage SaaS company. Below 2, growth is a treadmill: most of what sales wins, churn takes back.
The ratio exists because headline growth hides its own cost. Two companies adding €10,000 of net new MRR look identical until you see that one added €12,000 and lost €2,000 while the other added €40,000 and lost €30,000. Same net result, and the second company is running much harder to stand nearly still.
It reads best alongside net revenue retention rather than instead of it: NRR watches only the existing customer base, while the quick ratio includes new business, so together they separate an acquisition problem from a retention problem.
Related terms
Keep this number live
Plainhub computes saas quick ratio from money you record in plain words, so it is current when you need it rather than the night before a board meeting.
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