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Quick Ratio (SaaS) Calculator

Enter your new, expansion, churned and contraction MRR to see how efficiently you grow.

How it is calculated

The quick ratio compares monthly recurring revenue gained with revenue lost in the same period. quick ratio = (new MRR + expansion MRR) ÷ (churned MRR + contraction MRR). New MRR comes from new customers, expansion from existing customers who upgrade or add seats, churned from customers who cancel and contraction from customers who downgrade. All four fields are amounts in dollars for one period and must be zero or more. Every field has to be filled in; enter 0 where nothing happened, since an empty field gives no result. If churn plus contraction is zero the ratio cannot be calculated and nothing is shown. Besides the ratio the tool shows gained MRR, lost MRR and net new MRR, which is gained minus lost.

Worked example

In a month a software company adds 15,000 of new MRR and 4,200 of expansion MRR, while 4,800 churns and 1,200 contracts. Gained: 15,000 + 4,200 = 19,200, shown as $19,200.00. Lost: 4,800 + 1,200 = 6,000, shown as $6,000.00. The quick ratio is 19,200 ÷ 6,000 = 3.20. Net new MRR is 19,200 − 6,000 = $13,200.00. A ratio of 3.2 means 3.20 dollars of recurring revenue were won for every dollar lost that month.

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Common mistakes

  • Leaving a field empty instead of typing 0. The tool needs all four values and returns nothing when one is blank.
  • Using ARR for some fields and MRR for others. All four must be monthly amounts, or all for the same period.
  • Entering the number of customers lost instead of the revenue they paid. The ratio is built from money, not logo counts.
  • Putting downgrades in churn and then adding them again in contraction. A downgraded customer who stays is contraction, a cancelled one is churn.
  • Judging a single month in isolation. One large new deal or one large cancellation moves the ratio a lot, so compare several periods.

About this calculator

The SaaS Quick Ratio measures the quality of your recurring-revenue growth by comparing the MRR you are gaining against the MRR you are losing: (New MRR + Expansion MRR) divided by (Churned MRR + Contraction MRR). A ratio of 4 or higher is the widely cited benchmark for healthy, efficient growth — meaning you are adding four dollars of new and expansion revenue for every dollar lost to churn and downgrades — while a ratio near or below 1 signals the business is growing mostly on the back of new logos while quietly leaking existing customers.

SaaS founders and investors favor this metric because raw net MRR growth can hide a shrinking, unstable customer base behind strong new sales; the Quick Ratio isolates growth efficiency and is often tracked alongside net revenue retention (NRR) to see whether growth is durable or fragile.

This calculator takes your new, expansion, churned and contraction MRR for a period and returns the resulting Quick Ratio.

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