SaaS quick ratio
Also called: Quick ratio
The ratio of revenue gained to revenue lost in a period — a measure of how efficiently growth outpaces churn.
Quick ratio = (New MRR + Expansion MRR) ÷ (Churned MRR + Contraction MRR)
The SaaS quick ratio — unrelated to the accounting liquidity ratio of the same name — measures how much revenue you added for every dollar you lost. A ratio of 4 means you gained four dollars for each one that leaked out.
Rough reading: below 2 means churn is consuming most of your growth; 2–4 is normal; above 4 is strong.
What it catches that growth rate hides
Two companies can both grow 30% in a year. One added 35% and lost 5%; the other added 80% and lost 50%. Their growth rates are identical and their businesses are not remotely comparable — the second is running a treadmill that gets more expensive every quarter, because the churned base has to be replaced before any growth happens at all.
The quick ratio surfaces exactly that difference, which is why it is a useful sanity check next to headline growth.
Relationship to NRR
The quick ratio includes new business; NRR deliberately excludes it. So the quick ratio describes the whole revenue engine, while NRR isolates the existing base. A company can have a healthy quick ratio propped up entirely by new sales while NRR sits at 85% — an expensive way to grow, and one that stops working the moment new-sales productivity dips.
Stop calculating this in a spreadsheet
Bunny computes SaaS metrics, revenue schedules and retention from your live billing data — because quoting, subscriptions, usage and invoicing all sit in one system.