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LTV:CAC ratio calculator

Compare customer lifetime value to acquisition cost with the LTV:CAC ratio.

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The LTV:CAC ratio calculator turns Customer lifetime value (LTV), Acquisition cost (CAC) into LTV:CAC ratio (× CAC), Reading, instantly and for free. For instance, with Customer lifetime value (LTV) = $3,000.00 and Acquisition cost (CAC) = $800.00 it returns LTV:CAC ratio (× CAC) = 3.75 and Reading = healthy.

How to use it

  1. Enter your values: Customer lifetime value (LTV), Acquisition cost (CAC).
  2. Read the result instantly: LTV:CAC ratio (× CAC), Reading.

Frequently asked questions

What does the LTV:CAC ratio calculator actually compute?

It takes Customer lifetime value (LTV) and Acquisition cost (CAC) and derives LTV:CAC ratio (× CAC) and Reading from them. The calculation is live as you type, so the result updates on every change.

What information do I need to provide?

2 values: Customer lifetime value (LTV) ($) and Acquisition cost (CAC) ($). Nothing else is required — no account, no file upload.

Can you show a worked example?

With Customer lifetime value (LTV) = $3,000.00 and Acquisition cost (CAC) = $800.00, the calculator returns LTV:CAC ratio (× CAC) = 3.75 and Reading = healthy. Those figures come from running this exact tool, so you can reproduce them by entering the same values.

When would I actually use this?

Reporting to an investor or a board: what recurring revenue really is this month, what churn is costing, and how long it takes to earn back an acquisition.

What is the most common mistake?

Counting annual contracts at their full value in the month they are signed. MRR is the monthly-equivalent figure; booking a year of revenue in one month makes growth look like a step change that then reverses.

What is the difference between the LTV:CAC ratio calculator and the LTV calculator?

This one returns LTV:CAC ratio (× CAC) and Reading; the LTV calculator returns Lifetime value. That is the whole difference — open the one whose figure you need.

Is there a tool for the next step?

CAC payback period calculator is the closest one after this: Find how many months it takes to recover the cost of acquiring a customer.

What else is worth having open alongside it?

CAC calculator and Customer Acquisition Cost (CAC) Calculator — they come up in the same task often enough to be worth a second tab.

Where do the figures come from, and how current are they?

These definitions come from how subscription businesses report, not from an accounting standard — churn in particular is defined half a dozen ways, so state which one you used alongside the number.

Further reading

All guides →
ExplainerWhat LTV:CAC Ratio Should You Target? The Churn Estimate Decides ItEveryone quotes 3:1 and nobody states their churn assumption. With $100 ARPU and an 80 percent gross margin, moving monthly churn from 2 to 3 percent drops the ratio from 4.0:1 to 2.67:1 — a pass turned into a fail by one percentage point.ExplainerCAC Payback Period Explained: Why a 3:1 LTV/CAC Can Still Run Out of CashLTV/CAC says whether a customer is profitable eventually. Payback says whether you can afford to wait. The formula divides CAC by monthly gross profit — and the gross margin is the term nearly everyone drops.ExplainerWhat Is the Rule of 40? Six Ways to Score Exactly 40Growth rate plus profit margin should clear 40. But 60 percent growth at a minus 20 percent margin scores the same as 10 percent growth at a 30 percent margin — and on $10M of revenue those are opposite companies.ExplainerWhat Is Customer Acquisition Cost (CAC)? Formula and BenchmarksCustomer acquisition cost tells you what it really costs to win a new customer. Learn the formula, what to include, and how to read it against lifetime value.ExplainerWhat Is Customer Lifetime Value (LTV)? Formula and UsesCustomer lifetime value estimates the total worth of a customer over the whole relationship. Learn the formula, why margin matters, and how to use it.ExplainerWhat Is Customer Churn Rate? Formula and How to Reduce ItCustomer churn rate measures how fast you lose customers. Learn the formula, why it caps growth and shortens lifetime value, and how to reduce it.