This SaaS Quick Ratio can help the user to determine the direction of their bookings growth. It does not measure the Return on Investment efficiency regarding your booking acquisition, instead, it measures bookings growth against booking contraction.
The SaaS Quick Ratio is important to show subscription-based businesses their monthly recurring revenue, and whether they are net positive, or net negative. This table will not, however, pinpoint any problems, but instead just identify them.
Also included in this ready-to-use Excel ratio is a guideline helping to better assist the comprehension of results produced by the quick ratio.
SaaS Quick Ratio < 1: Generating this shows the business to be inefficient, having the ability to sustain a quick ratio of less than a month.
1 < Quick Ratio < 4: Although the company is growing, it is necessary to maintain high levels of customer acquisition in order to replenish lost bookings thus equalling less efficient growth.
Quick Ratio > 4: This is the preferred result on the metric which signals strong and efficient growth. It also makes it much more likely for investors to seriously consider your SaaS business.
Download this tool instantly to be able to see the direction of your MRR or ARR on a month-month basis.
