Quick Ratio

A measure of a business growth efficiency that compares the revenue you are gaining (new and expansion) against the revenue you are losing (churn and downgrades). Quick Ratio = (New revenue + Expansion revenue) / (Churned revenue + Contraction revenue).

It shows whether your growth is outpacing your losses. A quick ratio above 4 is considered healthy for a growing subscription business, meaning you gain £4 of revenue for every £1 you lose.

In one month a founder adds £4,000 in new and expansion revenue but loses £1,000 to cancellations and downgrades. Her quick ratio is 4, a sign of efficient, durable growth.