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SaaS Metrics

SaaS Quick Ratio

SaaS quick ratio measures growth quality by comparing positive MRR movements to negative movements in a period.

Updated 2026-01-23

Definition

SaaS quick ratio measures growth quality by comparing positive MRR movements to negative movements in a period.

Formula

Quick ratio = (new MRR + expansion MRR) / (contraction MRR + churned MRR)

Example

If new MRR is $40k and expansion is $10k, while contraction is $5k and churn is $15k, quick ratio = ($40k+$10k)/($5k+$15k) = 2.5.

How to use it

  • Use it to assess whether growth is healthy vs leaky.
  • Track by segment; blended ratios can hide churn pockets.

Common mistakes

  • Comparing periods with different definitions of MRR movements.
  • Using quick ratio alone without checking margin and payback.

Why this matters

This term matters because small changes compound in SaaS metrics. Use consistent definitions by cohort and segment so you can diagnose retention, payback, and growth quality.

Practical checklist

  • Write a 1-line definition for "SaaS Quick Ratio" that your team will use consistently.
  • Keep the time window consistent (weekly/monthly/quarterly) when comparing trends.
  • Segment results (channel/plan/cohort) before drawing big conclusions from blended averages.
  • Use a calculator that references this term (e.g., SaaS Quick Ratio Calculator) to sanity-check assumptions.
  • Read the related guide (e.g., SaaS Quick Ratio: definition, formula, and how to use it) for context and common pitfalls.

Where to use this on MetricKit

Calculators

Guides