Quick Ratio

What is Quick Ratio?

Quick Ratio is the ratio of MRR Won to MRR Lost over a period. It's used by SaaS businesses to assess their growth efficiency.

How is Quick Ratio used?

This ratio shows how much you grow your recurring revenue relative to the revenue you're losing, indicating the health and sustainability of your growth. A value over 1 indicates you're adding MRR Won at a faster rate than you're losing MRR Lost, and vice versa.

How to calculate Quick Ratio

To calculate Quick Ratio, divide your Monthly Recurring Revenue (MRR) Won by MRR Lost for a specific period.

Best Practices

Focus on both acquiring new customers and retaining existing ones to maintain a healthy Quick Ratio; try not to focus solely on one. Work to increase the LTV of customers, as this will positively affect the MRR Won component.

Common Misconceptions

This metric is not to be confused with the other 'Quick Ratio', also known as the Acid Test. This alternative metric measures your ability to meet short-term obligations with your most liquid assets.

FAQs

Supported Integrations

Get this metric directly out of one of our supported integrations.

Stripe

Online payment processing solution that supports e-commerce, subscriptions, and invoicing.

Recurly

Subscription management and billing platform.

Chargebee

Subscription billing and revenue management platform.

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