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SaaS Quick Ratio

Formula

(New Revenue + Expansion + Resurrection) ÷ (Contraction + Churned Revenue)

Definition

SaaS Quick Ratio compares revenue gained through new customers, expansion, and resurrection with revenue lost through contraction and customer churn.

It provides a measure of the quality of revenue growth by showing how much revenue is added for each dollar of revenue lost.

Interpretation

A higher SaaS Quick Ratio indicates that revenue gains are large relative to revenue losses. A ratio of 1x means gains equal losses, while a ratio below 1x means losses exceed gains.

The ratio should be evaluated alongside retention metrics because strong new customer acquisition can produce a high Quick Ratio even when the existing customer base has meaningful churn.

Benchmark

1x
Revenue gains equal revenue losses
4x
Common SaaS reference point for efficient growth

In MetricFrame

MetricFrame calculates SaaS Quick Ratio from customer-level revenue movements by dividing New Revenue, Expansion, and Resurrection by Contraction and Churned Revenue.

View in MetricFrame →