Growth Accounting
Breaking down user growth into its components. Reveals whether growth is healthy or hollow.
What it measures
A framework that decomposes user growth into New (first-time users), Retained (continued from last period), Resurrected (returned after absence), and Churned (stopped using).
Calculation Variants
- User Quick Ratio
- (New + Resurrected) / Churned. Measures growth efficiency. A ratio of 2.0 means you gain 2 users for every 1 you lose.
- Gross Retention
- Retained / Start MAU. Shows the floor of your user base stability.
What to watch
- High resurrection, high churn: Users cycle in and out. You're not building a stable base. Investigate why users leave and what brings them back.
- Low resurrection, low churn: Stable but may lack growth. Your existing users stay, but you're not winning back lapsed users.
- User Quick Ratio above 4: Excellent for SaaS. Above 1.5 is very good for consumer apps. Below 1 means you're shrinking.
In practice
A mobile game showed 15% MAU growth, but growth accounting revealed 60% of "active" users each month were resurrected players who churned again within weeks. True retained users were declining. They shifted focus from re-engagement campaigns to fixing the core gameplay loop that caused churn in the first place.
Illustrative scenario — a representative composite, not a specific company.
Vanity Risk
Top-line MAU growth is vanity when it masks a leaky bucket. If 60% of your "active" users each month are resurrected churners, you have a revolving door, not real growth.
Related: DAU — the daily input to growth accounting.; Churn Rate — understanding why users leave.