SaaS Quick Ratio Calculator
Calculate the SaaS Quick Ratio — a single metric that captures both growth and churn efficiency.
How to use this tool
- Enter new mrr (from new customers), expansion mrr (upgrades/upsells), churned mrr (cancellations) and contraction mrr (downgrades) in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your saas quick ratio and the full breakdown beneath it.
The SaaS Quick Ratio (coined by Mamoon Hamid) measures growth quality by comparing revenue gained to revenue lost in a period. A ratio above 4 is considered excellent; below 1 means you are shrinking.
Formula
Revenue Gained = New MRR + Expansion MRR
Revenue Lost = Churned MRR + Contraction MRR
SaaS Quick Ratio = Revenue Gained ÷ Revenue Lost
Net New MRR = Revenue Gained − Revenue Lost
How it works
The SaaS Quick Ratio, popularised by investor Mamoon Hamid, summarises growth quality in a single number by comparing all MRR gained (new customers plus upsells) against all MRR lost (cancellations plus downgrades). A ratio above 4 is generally considered strong for early-stage SaaS; below 1 means churn is outpacing growth. The calculation assumes all MRR figures are for the same time period.
Worked example
Worked example
- Revenue gained = $5,000 new MRR + $1,000 expansion MRR = $6,000.
- Revenue lost = $1,500 churned MRR + $500 contraction MRR = $2,000.
- SaaS Quick Ratio = $6,000 ÷ $2,000 = 3x.
- Net new MRR = $6,000 − $2,000 = $4,000.
SaaS Quick Ratio: 3x; Net new MRR: $4,000
Key terms
- MRR (Monthly Recurring Revenue)
- Predictable subscription revenue recognised each month, excluding one-time fees.
- New MRR
- MRR added from customers who did not exist in the business in the prior period.
- Expansion MRR
- Additional MRR from existing customers via upgrades, upsells, or seat additions.
- Churned MRR
- MRR lost because existing customers cancelled their subscriptions entirely.
- Contraction MRR
- MRR lost because existing customers downgraded to a lower-priced plan without cancelling.
Frequently asked questions
- What is a good SaaS Quick Ratio?
- Quick Ratio ≥ 4 is excellent (high growth, low churn). 2–4 is solid. 1–2 means growth is being offset heavily by churn. Below 1 means net MRR is declining.
- How is SaaS Quick Ratio different from the traditional quick ratio?
- The traditional quick ratio (current assets / current liabilities) measures liquidity. The SaaS Quick Ratio measures revenue growth quality — it has no relationship to the accounting quick ratio beyond sharing the name.