SaaS quick ratio explained
Quick ratio shows whether growth is compounding or just replacing losses. Above 4 is strong; near 1 means you are treading water.
SaaS quick ratio asks whether growth is compounding or just replacing losses. It compares what you added this period to what you lost.
The formula
Quick ratio = (New MRR + Expansion MRR) ÷ (Churned MRR + Contraction MRR)Near 1.0 you are treading water. Below 1.0 losses beat adds.
How to read it
Above 4 means adds dominate losses. Between 1 and 4 means you are growing slowly while still leaking. At or below 1, every new dollar mostly replaces what left.
Quick ratio does not replace churn rate. Use both: churn shows the leak size; quick ratio shows whether the business still compounds.
When MRR looks flat, quick ratio often explains why busy acquisition is not net growth.
Flat MRR diagnosis: Why is my MRR flat? Gross vs net churn math: net vs gross MRR churn.
Get the ratios, then diagnose the change.
Calculate SaaS KPIs, then rank why revenue moved.
Or connect FlarePath for ongoing diagnosis.