SaaS quick ratio

Why it matters

It shows the efficiency of growth. Two businesses with the same net new MRR can have very different quick ratios, and the one losing less has the healthier base.

Worked example

The table shows the columns this metric needs from six months of a made-up subscription brand. Add each column up over the six months, then put the totals into the formula:

(₹1,51,000 + ₹44,100) ÷ (₹25,100 + ₹69,400) = 2.06×

Add up first, then divide. Averaging the six monthly figures gives a slightly different answer, because it counts a small month the same as a large one.

Month by month

SaaS quick ratio calculator

How to read it

A falling quick ratio with steady new MRR is a retention warning before it shows up in growth rate.

Common mistakes

• It is undefined when nothing was lost; small early-stage businesses get extreme values.
• It is unrelated to the accounting quick ratio (current assets over liabilities).
• Use the same MRR categories as net new MRR so the two reconcile.

Calculate saaS quick ratio in Excel, SQL or Python

The quickest version, for the sample sheet laid out as in the CSV (headers in row 1, months in rows 2 to 7):

=(SUM(AB2:AB7) + SUM(AC2:AC7)) / (SUM(AD2:AD7) + SUM(AE2:AE7))

• SaaS quick ratio in Excel and Google Sheets — per-month formula and zero-safe version
• SaaS quick ratio in SQL — query by month and for the period
• SaaS quick ratio in Python (pandas) — pandas script with expected output

Related metrics

• Net new MRR
• Gross revenue churn rate
• MRR growth rate

See all business metrics, or the statistics methods that sit behind them.

Questions people ask

What is saaS quick ratio?

The SaaS quick ratio compares recurring revenue added with recurring revenue lost: new plus expansion MRR divided by contraction plus churned MRR. Above 1, MRR grows.

How do you calculate saaS quick ratio?

Quick ratio = (New MRR + Expansion MRR) ÷ (Contraction MRR + Churned MRR). For example, with six months of sample data: (₹1,51,000 + ₹44,100) ÷ (₹25,100 + ₹69,400) = 2.06×.

What is the saaS quick ratio formula in Excel?

With the sample data laid out as in the downloadable CSV, =(SUM(AB2:AB7) + SUM(AC2:AC7)) / (SUM(AD2:AD7) + SUM(AE2:AE7)) gives the figure for the whole period. For one month, use =(AB2 + AC2) / (AD2 + AE2) and fill it down.

What is a good saaS quick ratio?

There is no figure that is right for every business: it depends on your products, prices and channels. A falling quick ratio with steady new MRR is a retention warning before it shows up in growth rate.

Check how stable it is

• Standard deviation
• Moving average
• Z-score
• Linear trend forecast

Guides

• How to find out what changed in your sales data — 2 min read
• Real change or random noise? A plain guide to reading your numbers — 2 min read
• Excel data analysis: formulas, PivotTables and the ToolPak — 3 min read

About the data on this page

The figures come from a small made-up dataset, printed above in full so you can check every number by hand. Download it as monthly.csv. The results are computed from those rows when the page is built, and the Excel formulas, SQL and Python on these pages are run against the same rows before publishing, so the code and the answers agree.

To get these numbers from your own data without writing formulas, try AnalyzeIt: ask in plain words and it shows the working behind every figure.