SaaS Quick Ratio Calculator
Recurring revenue added against recurring revenue lost in the same month — the ratio that says how efficiently a subscription business is growing.
Take everything that increased monthly recurring revenue — new customers and expansion — and divide by everything that reduced it — contraction and churn.
How the saas quick ratio calculator works
Take everything that increased monthly recurring revenue — new customers and expansion — and divide by everything that reduced it — contraction and churn. A ratio of 4 means four units of revenue were added for every one lost.
It is a growth-quality measure rather than a growth measure: a business adding a great deal while losing a great deal has a low ratio and a leaky base, whatever its net growth looks like.
Formula: quick ratio = (new MRR + expansion MRR) ÷ (contraction MRR + churned MRR)
Worked examples
| Inputs | Quick ratio | Note |
|---|---|---|
| Healthy month | 5 added per unit lost | 25,000 added, 5,000 lost |
| Leaky base | 1.33 added per unit lost | 32,000 added, 24,000 lost |
| Shrinking | 0.75 added per unit lost | 9,000 added, 12,000 lost |
FAQFrequently asked questions
What is a good quick ratio?
Four or more is generally considered healthy for a growing subscription business; between one and two means most new revenue is replacing what was lost; below one the base is shrinking. It matters most in the early years, when losses are a large share of what is added.
Why include expansion and contraction?
Because an upgrade or a downgrade changes recurring revenue just as a new customer or a cancellation does. Leaving them out overstates the churn problem in a business that expands well, and hides it in one that is quietly downgrading.
How does this relate to net revenue retention?
Net revenue retention looks only at existing customers — expansion against contraction and churn — while the quick ratio adds new business on top. A high quick ratio with low retention means growth is being bought, not kept.
What period should I use?
A month, consistently, with all four figures from the same month. Quarterly figures smooth the noise in a small base; whichever you use, compare like with like over time.
Where these figures come from
- Reichheld (2003), Harvard Business Review — The One Number You Need to Grow — the paper that introduced Net Promoter Score
- Financial Reporting Council — the UK accounting regulator
Last checked: September 2026. These are the industry-standard definitions; where companies commonly disagree, the page says so.