What is Quick Ratio metric in RevenueStory?

Modified on: Mon, 27 Sep, 2021 at 6:18 PM

Ratio of total earning and total loss in monthly recurring revenue.

This is an indicator of how well your business is growing vis-à-vis its churn.


How it's measured

Quick Ratio = (New MRR + Expansion MRR)/(Downgrade MRR + Cancellation MRR)


Note: Cancellations within the same month of Activation are not considered.


Reading

Up: Good


Interpretation


This metric indicates if your business is shrinking more than it is expanding. It is a good indicator of the business sustainability. For example, if the quick ratio is more than 2, then you are expanding at least twice as fast as you are shrinking and that’s a very good sign.


Click here to know about other metrics.

M
Monica is the author of this solution article.

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