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Quick Ratio

Growth efficiency: dollars added per dollar lost.

Put this metric to work: explore FlowMRR's MRR movement analytics to track revenue movements, retention and forecasts from your own account.

How many dollars of new, reactivation, and expansion MRR you add for every dollar lost to churn and contraction. FlowMRR includes reactivation in the gains; disclose this when comparing with a quick ratio that excludes win-backs.

Formula

Quick Ratio = (New + Reactivation + Expansion) ÷ (Contraction + Churn)

Worked example

(New 5,000 + Reactivation 500 + Expansion 1,500) ÷ (Contraction 400 + Churn 2,100) = 7,000 ÷ 2,500 = 2.8.

Illustrative comparisons

Target

These unsourced ranges are illustrative scenarios, not measured industry benchmarks, percentiles or recommended targets. Their qualitative labels are editorial interpretations. Compare your own cohorts using the same segment, period, currency and measurement basis.

Excellent
> 4
Healthy
2–4
Stalling
< 1

Why it matters

Quick Ratio above 4 means you're winning fast and losing slow — that's the profile of a company that can deploy capital aggressively. Below 1 means you're net-shrinking your installed base. It's a forward-looking indicator: companies tend to follow their quick ratio for 6–12 months before MRR catches up.

Common mistakes

  • Computing on customer counts instead of MRR (different signal).
  • Smoothing by using TTM — the metric is most useful month-by-month to catch turning points.
  • Treating zero-loss months as a normal ratio — call out the denominator instead of dividing by zero.
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