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How to calculate the SaaS quick ratio in Excel and Google Sheets
Topic:SaaS metricsExcel & Google Sheets
=(B2+C2)/(D2+E2)✓
Verified example
Computed by a real spreadsheet engine on the sample data below.
| Month | New MRR | Expansion MRR | Churned MRR | Contraction MRR | Quick Ratio |
| Jan | 5000 | 1200 | 800 | 400 | |
| Feb | 6500 | 900 | 1100 | 300 | |
| Mar | 4800 | 1500 | 700 | 200 |
=(B2+C2)/(D2+E2)→5.1666666667
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Step by step
- 1Set up a row with headers: Month (A1), New MRR (B1), Expansion MRR (C1), Churned MRR (D1), Contraction MRR (E1), Quick Ratio (F1).
- 2Enter your MRR data for each month starting in row 2 — for example, B2=5000, C2=1200, D2=800, E2=400.
- 3In F2, enter the formula =(B2+C2)/(D2+E2) to compute that month's quick ratio.
- 4Drag F2 down to cover all months, or use IFERROR(=(B2+C2)/(D2+E2),"N/A") to guard against divide-by-zero when churn is zero.
- 5Add a conditional format on column F to highlight values below 1 in red and above 4 in green for quick visual health checks.
Tips
- Never include one-time fees in MRR — only true recurring revenue components belong in the numerator and denominator.
- If both Churned MRR and Contraction MRR are zero in a given month (common for early-stage), wrap the formula in IFERROR to avoid a #DIV/0! error.
- Track the quick ratio over a rolling 3-month average to smooth out seasonal spikes: =AVERAGE(F2:F4).
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Frequently asked
What is a good SaaS quick ratio?
A ratio of 4 or higher is considered healthy for growth-stage SaaS companies. Ratios between 1 and 4 indicate moderate growth with meaningful churn pressure. Below 1 means the business is shrinking in net MRR terms.
Should I include reactivated customers in New MRR?
Most SaaS finance teams treat reactivated MRR as a separate category or add it to New MRR. Whichever you choose, be consistent month over month so the ratio is comparable across periods.
How is SaaS quick ratio different from the current ratio?
The traditional quick ratio is a balance-sheet liquidity measure (liquid assets / short-term liabilities). The SaaS quick ratio is a revenue-growth-efficiency metric and uses MRR components, not balance-sheet line items.
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