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SaaS Quick Ratio Calculator

Enter your new, expansion, churned and contraction MRR to see your SaaS quick ratio.

How it is calculated

The tool adds up the monthly recurring revenue gained and lost in one period and divides the two. gained = new MRR + expansion MRR. lost = churned MRR + contraction MRR. quick ratio = gained ÷ lost, shown to two decimals. It also reports net new MRR = gained − lost. New MRR is from brand-new customers, expansion is upgrades and add-ons from existing customers, churned MRR is from customers who cancelled, and contraction is downgrades from customers who stayed. All four amounts must be from the same period and in the same currency. Any amount can be zero, but if nothing was lost (churn and contraction both zero) the ratio would divide by zero, so no result is shown. A ratio below 1 means net new MRR is negative.

Worked example

In one month you add $30,000 of new MRR and $8,000 of expansion MRR. You lose $7,000 to cancellations and $3,000 to downgrades. Gained: 30,000 + 8,000 = $38,000.00. Lost: 7,000 + 3,000 = $10,000.00. Quick ratio: 38,000 ÷ 10,000 = 3.80. Net new MRR: 38,000 − 10,000 = $28,000.00. So for every dollar of recurring revenue lost, the business adds $3.80, and the month closes with $28,000 more MRR than it started with.

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Common mistakes

  • Counting downgrades as churn or leaving them out. Downgrades by customers who stay belong in contraction MRR; leaving them out inflates the ratio.
  • Entering customer counts instead of revenue amounts. All four fields are MRR in money, so 12 new customers must be converted to their monthly revenue.
  • Typing churned MRR as a negative number. The fields are positive amounts; a negative value returns no result.
  • Mixing periods, for example quarterly new MRR with monthly churn. Use the same month or quarter for all four.
  • Reading a very high ratio as proof of health. With very little churn the ratio shoots up even if growth is slow, so check net new MRR as well.

About this calculator

The SaaS Quick Ratio, popularized by finance operator Ben Murray, measures growth efficiency by dividing new MRR plus expansion MRR by churned MRR plus contraction MRR in the same period. A value above 4 signals healthy, efficient growth where new and expansion revenue vastly outpaces losses; a value near or below 1 means the business is losing roughly as much recurring revenue as it is adding, a warning sign even if the top-line MRR chart still looks like it is climbing.

SaaS finance teams and boards use this ratio alongside net revenue retention to separate "growth that is working" from "growth that is masking churn," since a company can post rising MRR every month while its underlying retention quietly deteriorates. It is a favorite diligence metric for investors precisely because it exposes that gap in a single number.

This calculator takes your new, expansion, churned and contraction MRR for a period and returns your SaaS quick ratio, so you can see at a glance how efficiently each dollar of growth is being generated relative to what you are losing.

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