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★ Is growth outrunning churn, or are we refilling a leaky bucket?

SaaS Quick Ratio Calculator

Calculate the SaaS quick ratio: new plus expansion MRR divided by churned plus contraction MRR. See how it compares with the benchmark of 4.

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Your Quick ratio

4.3 : 1

Efficient growth

  • Net new MRR this month: $11,500.
  • For every 1 of MRR lost, 4.29 comes in.

quick ratio = (new MRR + expansion MRR) ÷ (churned MRR + contraction MRR)

Quick ratio: 4.3 : 1.

Leaky bucket? Churn and contraction are product problems before they're sales problems.

Let's talk
01

How it works

quick ratio = (new MRR + expansion MRR) ÷ (churned MRR + contraction MRR)

The numerator is MRR gained, the denominator MRR lost. A ratio of 4 means for every $1 lost, $4 comes in.

Two companies with the same net growth can have very different quick ratios. The one replacing heavy churn with heavy acquisition is fragile: the moment acquisition slows, it shrinks.

02

Worked example

In one month a company adds $12,000 of new MRR and $3,000 of expansion, and loses $2,500 to churn and $1,000 to downgrades.

Quick ratio worked example
InputValue
New MRR$12,000
Expansion MRR$3,000
Churned MRR$2,500
Contraction MRR$1,000
Quick ratio4.3 : 1

That lands in the efficient growth band. Change any input above to run your own numbers.

03

Benchmarks

Mamoon Hamid introduced the quick ratio at SaaStr in 2015 and said data suggested a ratio of four or above is quite desirable. It is one investor’s bar; products for small businesses often run lower.

Quick ratio benchmark bands
Quick ratioReading
under 1:1Shrinking: losing more than you add
1:1 to 4:1Growing, but the bucket leaks
4:1 and aboveEfficient growth

Source: Mamoon Hamid at SaaStr, transcript.

04

How to improve it

  • Reduce churned MRR first: it improves the denominator directly.
  • Make expansion part of the product, so existing customers add MRR without a sales push.
  • Catch downgrades early by watching usage drops.
  • Recover failed payments before they turn into churn.
05

Questions founders actually ask

What is a good SaaS quick ratio?
Mamoon Hamid, who introduced the metric, called four or above quite desirable. Below 1 means MRR is shrinking.
How often should I calculate it?
Monthly, with a three-month rolling average to smooth out lumpy deals.
Why does the quick ratio fall as companies grow?
Churn scales with the size of the customer base, while new MRR depends on acquisition capacity. Over time the denominator grows faster, so mature companies usually have lower ratios.
How is it different from NRR?
NRR looks only at existing customers over a year. The quick ratio includes new customers and looks at one period, so it describes how efficiently the whole business grows.
06

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07

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Fine print

Tools: on the house.
Engineer: by the hour.

Moving them is the expensive part, and the part I'm good at: activation flows, upsell moments and the product work behind better numbers.

I'm Himanshu, an AI and full-stack engineer. I build MVPs, AI agents and the growth plumbing around them for early-stage startups.

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