SaaS Quick Ratio
Definition
SaaS Quick Ratio: SaaS Quick Ratio measures growth efficiency by dividing revenue gained (new + expansion) by revenue lost (churn + contraction). A ratio above 4 is excellent; above 2 is good. It shows whether you're acquiring customers faster than losing them.
Example Usage
“With $100K new ARR and $20K churned, our Quick Ratio of 5 shows efficient growth.”
Common Misconceptions
Related Terms
Churn Rate
Churn rate measures the percentage of customers or revenue lost over a period. Customer churn counts lost accounts, while revenue churn measures lost...
Net Revenue Retention
Net Revenue Retention measures the percentage of recurring revenue retained from existing customers over a period, including expansions, contractions,...
Expansion Revenue
Expansion revenue is additional revenue from existing customers through upsells, cross-sells, or increased usage. Strong expansion revenue can offset...
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