--- title: "SaaS Quick Ratio: What It Is & Why It Matters | Jirav" description: The SaaS Quick Ratio measures the net inflows and outflows of revenue for a SaaS business to determine the direction of a company’s growth. Learn more. --- ![](https://www.jirav.com/hs-fs/hubfs/Imported%20sitepage%20images/header-logo.png?width=98&name=header-logo.png) - [ Resources ](https://www.jirav.com/resources) - Menu / Resources - [Resource Center ](https://www.jirav.com/resources) Blogs and resources on all things finance, FP&A, and Jirav [Webinars ](https://www.jirav.com/webinars) Learn more about Jirav and FP&A from industry experts [Events ](https://www.jirav.com/events) See our upcoming calendar of events [Help Center ](https://help.jirav.com/) Guide on how to use Jirav - [ Company ](https://www.jirav.com/company) - Menu / Company - [About ](https://www.jirav.com/company) Learn about Jirav’s story and meet our leadership team [News Coverage ](https://www.jirav.com/news) See the latest news and highlights [Press ](https://www.jirav.com/press-releases) Recent company announcements and updates [Careers ](https://www.jirav.com/careers) View current job openings and learn how to join the Jirav Tower ![business_env](https://www.jirav.com/hubfs/business_env.svg) [ For Businesses ](https://www.jirav.com/reporting-planning-purpose-built-for-businesses) ![accounting_calc](https://www.jirav.com/hubfs/accounting_calc.svg) [ For Accounting & CFO Firms ](https://www.jirav.com/reporting-planning-purpose-built-for-accounting-cfo-advisory-firms) [ Get a Demo ](https://www.jirav.com/request-demo) [ Sign in ](https://app.jirav.com/) ![](https://www.jirav.com/hubfs/April2021/images/banner-shap.png) BLOG # SaaS Quick Ratio: What It Is & Why It Matters | Jirav [![](https://www.jirav.com/hubfs/April2021/images/fb-icon.png) ](http://www.facebook.com/share.php?u=https://www.jirav.com/saas-metrics-library/saas-quick-ratio/) [![](https://www.jirav.com/hubfs/April2021/images/tw-icon.png) ](https://twitter.com/share?url=https://www.jirav.com/saas-metrics-library/saas-quick-ratio/) [![](https://www.jirav.com/hubfs/April2021/images/in-icon.png) ](http://www.linkedin.com/shareArticle?mini=true&url=https://www.jirav.com/saas-metrics-library/saas-quick-ratio/&summary=&source=CeBIT) 1 minute read ![](https://www.jirav.com/hubfs/April2021/images/Resources-tile-pattern-giraffe@2x.png) ### What is the SaaS Quick Ratio? The SaaS Quick Ratio measures the net inflows and outflows of revenue for a SaaS business to determine the direction of a company’s growth. ### Why the SaaS Quick Ratio Is Important The SaaS Quick Ratio is a key metrics for SaaS companies to track growth efficiency. A low ratio may indicate that a company is having difficulty sustaining revenue growth, while a high ratio may signal that a company is enjoying steady but high revenue growth. The SaaS Quick Ratio is also a commonly requested metric by investors. Generally a SaaS Quick Ratio less than 1 represents a company that is in serious trouble. A result between 1 and 4 is average and represents a company that is growing, but perhaps growing inefficiently. A result greater than 4 represents a company that is growing efficiently at a good rate. ### How to Calculate the SaaS Quick Ratio The SaaS Quick Ratio measures booking growth through New and Expansion MRR and divides that by the lost bookings for existing customers through Downgrade and Churned MRR. The formula for the SaaS Quick Ratio is: SaaS Quick Ratio = (New MRR + Expansion MRR) / (Downgrade MRR + Churned MRR) For example, a company has new MRR of $30,000, upgrade MRR of $5,000, downgrade MRR of $4,000, and churned MRR of $8,000. The SaaS Quick Ratio for this company would be: SaaS Quick Ratio = ($30,000 + $5,000) / ($4,000 + $8,000) = 2.92 In this example, the company appears to be growing at an average or good pace but may be lacking efficiency in its growth. ##### Jirav Published April 25, 2023 ###### Related topics - [Metrics library](https://www.jirav.com/saas-metrics-library/tag/metrics-library) - [Saas metrics library](https://www.jirav.com/saas-metrics-library/tag/saas-metrics-library) ## Related blog posts ![](https://www.jirav.com/hubfs/April2021/images/Resources-tile-pattern-giraffe@2x.png) Metrics library #### ARR Growth Rate Explained & Why It's Important | Jirav [ Read more ](https://www.jirav.com/saas-metrics-library/annual-recurring-revenue-growth-percentage) ![](https://www.jirav.com/hubfs/April2021/images/Resources-tile-pattern-giraffe@2x.png) Metrics library #### Net Revenue Retention: What it Is & How To Calculate | Jirav [ Read more ](https://www.jirav.com/saas-metrics-library/net-revenue-retention/) ![](https://www.jirav.com/hubfs/April2021/images/Resources-tile-pattern-giraffe@2x.png) Metrics library #### Annual Recurring Revenue: What is ARR | Jirav [ Read more ](https://www.jirav.com/saas-metrics-library/annual-recurring-revenue) ![](https://www.jirav.com/hubfs/April2021/images/Resources-tile-pattern-giraffe@2x.png) Metrics library #### The Rule of 40: Definition + SaaS Calculator | Jirav [ Read more ](https://www.jirav.com/saas-metrics-library/rule-of-forty) ![](https://www.jirav.com/hubfs/April2021/images/Resources-tile-pattern-giraffe@2x.png) Metrics library #### SaaS Magic Number: Guide to Calculating & More | Jirav [ Read more ](https://www.jirav.com/saas-metrics-library/saas-magic-number) ![](https://www.jirav.com/hubfs/April2021/images/Resources-tile-pattern-giraffe@2x.png) Metrics library #### Gross Revenue Retention: Meaning & How to Calculate | Jirav [ Read more ](https://www.jirav.com/saas-metrics-library/gross-revenue-retention/) ![](https://www.jirav.com/hubfs/April2021/images/Resources-tile-pattern-giraffe@2x.png) Metrics library #### CAC Payback: How to Calculate & Why It's Important | Jirav [ Read more ](https://www.jirav.com/saas-metrics-library/cac-payback-customer-acquisition-costs) ![](https://www.jirav.com/hubfs/April2021/images/Resources-tile-pattern-giraffe@2x.png) Metrics library #### What is Monthly Recurring Revenue (MRR) | Jirav [ Read more ](https://www.jirav.com/saas-metrics-library/monthly-recurring-revenue) ![](https://www.jirav.com/hubfs/April2021/images/Resources-tile-pattern-giraffe@2x.png) Metrics library #### What is Expansion Rate & Why Does it Matter? | Jirav [ Read more ](https://www.jirav.com/saas-metrics-library/expansion-percentage/) [Load more](##) ## Let’s get started! 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