What is a good SaaS Quick Ratio?

A Quick Ratio above 4 is generally considered healthy for early-stage SaaS companies. Between 2 and 4 is acceptable but warrants attention to churn. Below 2 signals that churn is consuming too much of your new growth.

What is the difference between Churned MRR and Contraction MRR?

Churned MRR is revenue lost from customers who cancelled their subscriptions entirely. Contraction MRR is revenue lost from customers who stayed but downgraded to a lower tier or reduced seats.

What is Expansion MRR?

Expansion MRR is additional revenue earned from existing customers through upgrades, add-ons, seat expansions, or cross-sells during the month. It does not include new customer revenue.

Can the Quick Ratio be infinite?

Yes — if Churned MRR and Contraction MRR are both zero, the denominator is zero and the ratio is mathematically undefined, meaning you lost no revenue at all. This is exceptional and rare outside of very early stages.

Who created the SaaS Quick Ratio?

The metric was popularized by Mamoon Hamid of Kleiner Perkins. It adapts the traditional financial quick ratio concept into a revenue-velocity lens for subscription businesses.

SaaS Quick Ratio Calculator

Name: SaaS Quick Ratio Calculator
Availability: InStock
Author: Nham Vu

Enter your MRR components and instantly see your SaaS Quick Ratio with a benchmark rating.

MRR Components

Enter values in dollars. Leave Churned and Contraction at zero if none applies.

New MRR (new customers)

Expansion MRR (upgrades & add-ons)

Churned MRR (cancellations)

Contraction MRR (downgrades)

Enter your MRR values and click Calculate.

Quick Ratio Benchmarks

Healthy growth

Ratio > 4

Moderate — watch churn

2 – 4

Concerning — churn exceeds growth

Ratio < 2

Summary

Enter your MRR components and instantly see your SaaS Quick Ratio with a benchmark rating.

How it works

Enter your New MRR — revenue from brand new customers this month.
Enter your Expansion MRR — additional revenue from existing customers via upgrades or add-ons.
Enter your Churned MRR — revenue lost from customers who canceled entirely.
Enter your Contraction MRR — revenue lost from existing customers who downgraded.
The calculator divides (New MRR + Expansion MRR) by (Churned MRR + Contraction MRR) to produce your Quick Ratio.

Use cases

Benchmark monthly growth health before a fundraising round.
Track whether expansion revenue is offsetting churn over time.
Compare growth efficiency across different product tiers or cohorts.
Present investor-ready MRR efficiency data in board meetings.

Frequently Asked Questions

Last updated: 2026-07-01 · Reviewed by Nham Vu