Magic Number vs Quick Ratio
Magic Number (SaaS Magic Number) and Quick Ratio (SaaS Quick Ratio) both come up in business conversations and get confused. Here's the plain-English difference, side by side, so you can use each one with confidence.
The key difference: Magic Number refers to saas magic number, while Quick Ratio refers to saas quick ratio — they describe different things even when they show up in the same sentence.
Magic Number — SaaS Magic Number
Net new ARR in a quarter divided by prior-quarter sales & marketing spend. Above 1.0 means efficient growth worth accelerating; below 0.5 means the funnel is broken.
Full Magic Number definition →
Quick Ratio — SaaS Quick Ratio
New + expansion MRR divided by churned + contracted MRR. A quick ratio above 4 means you're adding revenue four times faster than you're losing it — a sign of durable momentum.
When to use Magic Number
Reach for "Magic Number" when the conversation is specifically about saas magic number. Net new ARR in a quarter divided by prior-quarter sales & marketing spend. Above 1.0 means efficient growth worth accelerating; below 0.5 means the funnel is broken.
When to use Quick Ratio
Reach for "Quick Ratio" when the conversation is specifically about saas quick ratio. New + expansion MRR divided by churned + contracted MRR. A quick ratio above 4 means you're adding revenue four times faster than you're losing it — a sign of durable momentum.
FAQs
What is the difference between Magic Number and Quick Ratio?
Magic Number stands for SaaS Magic Number — Net new ARR in a quarter divided by prior-quarter sales & marketing spend. Above 1.0 means efficient growth worth accelerating; below 0.5 means the funnel is broken. Quick Ratio stands for SaaS Quick Ratio — New + expansion MRR divided by churned + contracted MRR. A quick ratio above 4 means you're adding revenue four times faster than you're losing it — a sign of durable momentum.
Are Magic Number and Quick Ratio the same thing?
No. They're often used in the same conversation because they're related, but they describe different concepts. Magic Number = SaaS Magic Number. Quick Ratio = SaaS Quick Ratio.
When should I use Magic Number vs Quick Ratio?
Use Magic Number when you're specifically referring to saas magic number. Use Quick Ratio when the topic is saas quick ratio.