SaaS Quick Ratio Calculator

The common health bar is 4 or higher: at least $4 of MRR gained for every $1 lost. Between 1 and 2 you're on a treadmill, replacing churn about as fast as you grow. Below 1, the business is shrinking even when new sales look fine. Check the mix too: a ratio propped up by heavy new sales over a leaky base is far more fragile than the same ratio built on expansion and low churn.

Land each month's MRR movements in a Ferra table and you can pull the quick ratio by month or segment with a question, leaks show up while they're still small.

Four numbers from a single month: two kinds of gain, two kinds of loss. The calculator divides the MRR you gained by the MRR you lost, showing how efficiently the business grows relative to its own leaks.

New plus expansion is your gain. Churned plus contraction is your loss. Divide gain by loss, and pull all four figures from the same month, or the result means nothing.

A company adds $25,000 of new MRR and $5,000 of expansion in a month while losing $9,000 to churn and $1,000 to contraction. MRR gained is $25,000 + $5,000 = $30,000; MRR lost is $9,000 + $1,000 = $10,000. Quick ratio: $30,000 / $10,000 = 3, three dollars of recurring revenue in for every dollar out.

Mixed periods and mixed units wreck this ratio quietly: a month of new MRR against a quarter of churn, or MRR in one field and ARR in another. Misclassification does the same: log a downgrade as churn or an upgrade as new MRR and the ratio moves with zero change in the business. And this is not the accounting quick ratio, which compares liquid assets to liabilities and shares nothing but the name.

Four is the bar: a healthy growth-stage SaaS company adds $4 of recurring revenue for every $1 it loses. Above 4, growth is efficient and most new revenue survives the leaks. Between 2 and 4, growth is real but expensive to sustain. Below 2 you're filling a leaky bucket, and below 1 it drains faster than you pour.

One month can lie. A single large cancellation craters the ratio, so read it as a rolling trend rather than reacting to one print. Two companies can also share a ratio in very different health: strong sales over heavy churn versus modest sales over minimal churn, and the second is the stronger business. Look at the components, not just the quotient.

Grow the numerator or shrink the denominator. Shrinking churn is almost always the cheaper move.