SaaS Quick Ratio measures the quality of your MRR growth. Coined by Mamoon Hamid at Kleiner Perkins, it answers: for every dollar of MRR you lose, how many dollars of new MRR are you generating?
Formula: Quick Ratio = (New MRR + Expansion MRR) / (Contraction + Churned MRR)
Benchmarks
- > 4x: Exceptional — world-class growth quality
- 2–4x: Healthy — typical Series A/B requirement
- 1–2x: Marginal — growing but churn offsets most gains
- < 1x: Declining
Why it matters
Two companies can have the same gross MRR growth but very different quick ratios. A 30% gross growth rate with 25% churn has a Quick Ratio under 2x — the business is on a treadmill. The same growth rate with 5% churn might be 6x — genuinely compounding.
Quick Ratio separates real growth from "replacing churn."
Use the SaaS Quick Ratio Calculator to calculate yours instantly.