Plain-language questions
Ask for saaS quick ratio per month, customer or product in the SQL Explorer with AI. The AI writes the SQL, you see the query and run it yourself; the AI only receives metadata.
KPI · Subscriptions and SaaS
SaaS quick ratio: formula and example.
The SaaS quick ratio is MRR gained (new, expansion and reactivation) divided by MRR lost (contraction and churn) in the same period. It shows how efficiently you grow: how much new revenue you need to offset losses. Note that this differs from the quick ratio in financial analysis, which is about liquidity.
SaaS quick ratio formula
(New MRR + expansion MRR + reactivation MRR) ÷ (contraction MRR + churned MRR)
Worked example
In September, Acme's subscription service gains €2,600 new MRR, €900 expansion and €100 reactivation, €3,600 in total. It loses €400 to contraction and €1,400 to churn, €1,800 in total. The SaaS quick ratio is €3,600 ÷ €1,800 = 2.0.
Fictitious figures for Acme Groothandel, a sample wholesaler.
How to read this KPI
A ratio above 1 means MRR is growing; the higher the ratio, the less growth is held back by losses. A low ratio with high MRR growth means you need a lot of new revenue to fill a leaky bucket. Compare the ratio over several months, as one large cancellation or deal can swing it in a single month.
Pitfalls with saaS quick ratio
- Confusing the SaaS quick ratio with the financial quick ratio (liquidity).
- Months without losses produce a division by zero or an extreme value; show the components instead.
- Including or excluding reactivation without recording the choice.
SQL & DAX
Calculating saaS quick ratio in SQL and DAX
Two examples on a fictitious data warehouse for Acme Groothandel: a PostgreSQL query and a measure for a Power BI model. Adjust table and column names to your own model.
SELECT month,
SUM(amount) FILTER (WHERE movement_type IN ('new', 'expansion', 'reactivation')) AS gained_mrr,
SUM(amount) FILTER (WHERE movement_type IN ('contraction', 'churn')) AS lost_mrr,
ROUND(SUM(amount) FILTER (WHERE movement_type IN ('new', 'expansion', 'reactivation'))
/ NULLIF(SUM(amount) FILTER (WHERE movement_type IN ('contraction', 'churn')), 0), 2) AS saas_quick_ratio
FROM mrr_movements
GROUP BY month
ORDER BY month;SaaS Quick Ratio =
DIVIDE(
CALCULATE(SUM(MrrMovements[amount]), MrrMovements[movement_type] IN {"new", "expansion", "reactivation"}),
CALCULATE(SUM(MrrMovements[amount]), MrrMovements[movement_type] IN {"contraction", "churn"})
)In ENABLE
Tracking this KPI in ENABLE
In your Power BI dashboard
Define the KPI as a measure in your Power BI model and show it in the portal, with "Last refreshed" next to it. Access profiles and optional row-level security decide who sees which figures.
Custom dashboards (pilot)
Add the KPI as a tile to a custom dashboard, compared with last year. The Dashboard Builder is a pilot and can be switched on per client.
Monthly targets
With the built-in Targets app you set a target for the KPI per month, so you see actuals and target side by side.
FAQ
Frequently asked questions
How do you calculate the SaaS quick ratio?
Add new, expansion and reactivation MRR together and divide by the sum of contraction and churned MRR in the same period. With €5,000 gained and €2,000 lost, the ratio is 2.5. Ideally calculate it monthly and over a quarter.
What is the difference between the SaaS quick ratio and the quick ratio?
The SaaS quick ratio measures growth efficiency: MRR gained relative to MRR lost. The quick ratio in financial analysis measures liquidity: current assets excluding stock relative to current liabilities. They only share a name.
What does a SaaS quick ratio below 1 mean?
A ratio below 1 means you are losing more MRR than you gain, so recurring revenue is shrinking. Start by looking at the losses: is it customers churning or existing customers contracting? Reducing churn often has more effect than extra new sales.
Further reading
- KPI librarySaaS KPIs: MRR, churn and more explainedSubscription KPIs track recurring revenue: what comes in, what grows and what drops away. The data comes from your subscription or payment system and your CRM.Read more
- ResourcesHow to build a KPI dashboard: steps and examplesA KPI dashboard is an overview of the key figures you use to steer towards your goals, such as revenue, margin, on-time delivery or absenteeism. A good KPI dashboard does not start with the software, but with the decisions it needs to support. You then choose a limited number of KPIs, define them, sketch the dashboard and only then build it.Read more
- SolutionPower BI dashboard portal: share dashboards securelyShare your Power BI dashboards securely in your own portal, with role-based access.Read more
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