Free ForeverNo SignupGrowth EfficiencyUpdated 2026

SaaS Quick Ratio Calculator

Measure your MRR growth efficiency — how much new and expansion revenue you generate per dollar of churn.

SaaS Quick Ratio = (New MRR + Expansion MRR) ÷ (Churned MRR + Contraction MRR). Invented by Mamoon Hamid at Kleiner Perkins, it measures how efficiently you grow despite churn. A ratio of 4+ means you generate $4 of new/expansion MRR for every $1 lost to churn. The higher the better — a quick ratio of 1 means you're standing still.

New MRR

MRR from new customers this month

Expansion MRR

MRR from upsells and upgrades

Churned MRR

MRR lost to cancellations

Contraction MRR

MRR lost to downgrades

The Formula

Quick Ratio = (New MRR + Expansion MRR) ÷ (Churned MRR + Contraction MRR)

In plain English

Add new MRR and expansion MRR. Divide by the sum of churned MRR and contraction MRR.

Worked Example

($15K + $5K) ÷ ($3K + $1K) = $20K ÷ $4K = 5.0 Quick Ratio.

Why SaaS Quick Ratio Beats Raw Growth Rate

Raw MRR growth rate doesn't show efficiency — a company could be growing fast while burning capital to offset massive churn. Quick ratio reveals the quality of that growth: are you growing despite a healthy base, or growing while hiding a retention crisis?

A quick ratio of 4 at $1M MRR is very different from a quick ratio of 4 at $10M MRR. As MRR scales, maintaining a high quick ratio becomes harder — churn in absolute terms grows with the base.

Quick ratio benchmark for healthy SaaS

Quick ratio = flat MRR (churn = new)

< 1

MRR contracting — emergency signal

∞

Quick ratio when churn = zero

SaaS Quick Ratio Benchmarks (2026)

Quick Ratio	Interpretation	Growth Efficiency
4+	Excellent	High-quality growth
2–4	Good	Solid growth momentum
1–2	Marginal	Churn offsetting gains
< 1	Contracting	Emergency — MRR shrinking

Source: Mamoon Hamid KPCB SaaS Framework · OpenView Benchmarks 2025

Common Mistakes

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Not separating churned MRR from contraction MRR

Churn (full cancellation) and contraction (downgrade) require different retention strategies. Grouping them loses signal about which problem is larger.

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Targeting a high quick ratio by cutting growth spend

You can improve quick ratio by reducing new MRR spend — but that just means slower growth. Target quick ratio improvement through churn reduction, not acquisition cuts.

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Ignoring quick ratio trend

A declining quick ratio from 6 to 3 over 6 months is a warning sign even if the current number looks acceptable. Always track the trend, not just the snapshot.