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SaaS quick ratio calculator

The SaaS quick ratio compares the MRR you add with the MRR you lose. Enter new, expansion, contraction and churned MRR for a month. You get the ratio, a read on whether growth is efficient or leaking, and what your net new MRR is. A ratio of 4 or more is the benchmark most often quoted.

SaaS quick ratio calculator

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MRR from customers who joined this month.
Extra MRR from existing customers. Enter 0 if none.
MRR lost to downgrades. Enter 0 if none.
MRR from customers who cancelled. Enter 0 if none.

How it is calculated

Quick ratio = (new MRR + expansion MRR) ÷ (contraction MRR + churned MRR)

Growth in the numerator, leakage in the denominator. A company can grow fast with a poor quick ratio by spending heavily, but it is paying a high price for each euro of net growth. Mamoon Hamid popularised the 4× benchmark while at Social Capital.

Worked example

In one month a company adds 12,000 of new MRR and 3,000 of expansion. It loses 1,000 to downgrades and 2,000 to cancellations.

(12,000 + 3,000) ÷ (1,000 + 2,000) = 5.0×. Net new MRR is 12,000. A second company adding the same 15,000 but losing 8,000 would score 1.9× and net only 7,000.

How to read your result

The 4× benchmark is attributed to Mamoon Hamid (Social Capital). The other cut-offs are Mazo’s working thresholds, not industry statistics. A single month is noisy: use a trailing three months.

RangeReadingWhat it means
Under 1×ShrinkingYou lose more than you add.
1× to 2×Growing, but leakingMost new revenue replaces losses.
2× to 4×HealthyGrowth outruns the leak.
4× and overStrongThe benchmark most often quoted.

How to improve it

Shrink the denominator before growing the numerator

Halving what you lose doubles the ratio. When expansion is small, doubling new sales does about the same, usually at a far higher cost.

Add an expansion path

Expansion MRR counts as growth in the numerator without new acquisition cost. A value metric that grows with the customer creates it.

Separate downgrades from cancellations

Contraction and churn have different causes. Downgrades usually point to pricing or packaging, cancellations to product fit or onboarding.

Look at three months, not one

One large cancellation can swing a month. Add three months of each figure and divide for a steadier read.

Common mistakes

Counting new MRR from reactivations as new

A customer who returns after cancelling is not a new customer. Count them separately or the ratio flatters you.

Using revenue rather than MRR

One-off revenue and services distort the figures. Use recurring revenue only, with annual plans spread over twelve months.

Treating the ratio as a target for a young company

With five customers, one cancellation produces a poor ratio. It becomes meaningful once there are a few dozen customers.

FAQ

What is a good SaaS quick ratio?
A ratio of 4 or more is the benchmark most often quoted, attributed to Mamoon Hamid at Social Capital. Between 2 and 4 is healthy for an early company, and below 1 means the business is shrinking.
How is the quick ratio different from net revenue retention?
NRR looks only at existing customers. The quick ratio includes new customers in the numerator, so it measures overall growth quality. A company can have a poor NRR and a good quick ratio if it sells a lot of new business.
Should I use monthly or annual figures?
Either, as long as all four figures cover the same period. Monthly is most common, and a trailing three-month total is steadier than a single month.
What if I have zero churn this month?
The ratio has no upper limit, and the calculator says so. One clean month is not a trend. Check a longer window before concluding your retention is strong.

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Written by Madalena Rugeroni, founder of Mazo · Updated 10 November 2026. Benchmarks are credited to whoever published them; where a band is Mazo's own it is labelled as a working threshold. Results are a starting point, not financial advice. Mazo is not affiliated with or endorsed by the sources below.

  1. Mamoon Hamid, “SaaS Quick Ratio” (Social Capital), who popularised the 4× benchmark