A single number that tells you how efficiently you grow: how much recurring revenue you add for every euro of recurring revenue you lose.
Every month your MRR moves in two directions at once. You gain revenue from new customers and from existing customers who upgrade, and you lose revenue from customers who cancel or downgrade. The quick ratio puts those two flows on a scale: gains on top, losses on the bottom. If the number is well above 1, you're adding far more than you're losing and growth is efficient. If it drifts toward 1 or below, churn and contraction are eating most of what you bring in, and you're working hard just to stand still. It's a fast, blunt read on whether your growth engine is leaky.
Both the top and the bottom should cover the same period, and the bottom is always a positive number — you add the losses together rather than subtracting them.
In one month you add €20,000 of new MRR and €10,000 of expansion MRR. Over the same month you lose €4,000 to churn and €1,000 to contraction.
A quick ratio of 6.0 means you added six euros of recurring revenue for every euro you lost — efficient, healthy growth.
The rule of thumb most SaaS operators use:
| Quick ratio | Verdict | What it means |
|---|---|---|
| < 1 | Shrinking | Losses outpace gains |
| 1–2 | Fragile | Growing, but leaky |
| 2–4 | Healthy growth | Solid, sustainable |
| > 4 | Efficient growth | Adding far more than you lose |
Early-stage companies often post very high quick ratios simply because their churn base is small; as the customer base grows, keeping the ratio above 2 takes real retention discipline and steady expansion revenue.
Net revenue retention · Churn rate · MRR growth rate · Expansion revenue
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