Quick Ratio (SaaS)
What is Quick Ratio (SaaS)?
The SaaS Quick Ratio measures a company’s ability to grow recurring revenue despite churn. It is calculated by dividing the sum of New MRR and Expansion MRR by the sum of Churned MRR and Contraction MRR.
Why It Matters
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A ratio above 4.0 is often cited as a benchmark for high-growth, efficient SaaS companies.
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It provides a quick snapshot of whether the company’s growth is sustainable or being undermined by high churn.
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It helps investors assess the overall health and momentum of a subscription business.
