CAC Calculator
Sales + marketing spend in a slice ÷ newly acquired customers counted the same window.
Open calculator →LTV:CAC Ratio Calculator
Estimated LTV ÷ estimated CAC using definitions you already aligned between teams.
Overview
Use as a quick multiple check—not a growth mandate. Payback, working capital, and margin quality still decide whether you can scale.
When to use this calculator
- When you already have LTV and CAC estimates and want a simple multiple
- Before you scale paid acquisition and want a second opinion besides LTV alone
- When payback might be long even though the ratio looks “fine”
- When you warn the room that margin and cash timing still matter
Rule of thumb
A ratio above 1× only says LTV beats CAC in the model. Many teams still want more cushion once payback and cash are on the table.
Terms used in this calculator
- LTV:CAC ratio
- Lifetime sketch divided by acquisition cost using numbers you willingly paired upfront.
- LTV
- A simple lifetime earnings sketch from average revenue, margin, and churn—not a prophecy.
- CAC
- Acquisition spend you assign divided by how many fresh paying customers you credit in that same window.
Calculator
LTV:CAC ratio
9.00x
Results are simplified estimates for educational purposes only and should not be treated as financial, accounting, legal, or tax advice. See our disclaimer for details.
Formula
Lifetime value ÷ customer acquisition cost. Pair inputs from parallel cohorts when possible.
Example calculation
Using the default example values from the JSON seed for this tool:
- Customer LTV
- 5400
- CAC
- 600
Result: 9.00x (LTV:CAC ratio)
How to interpret this result
How many times lifetime value covers acquisition cost using the paired inputs.
Healthy ranges depend on payback, sales efficiency, and capital constraints—not one universal number.
Ensure LTV and CAC come from consistent cohorts and horizons.
Common mistakes
- Pairing cohort LTV with a single-channel CAC from another cohort.
- Using incompatible time horizons for LTV vs CAC.
- Ignoring payback even when the ratio looks high.
What to do next
Open payback months and churn calculators so the headline multiple has cash context.
How to improve this result
- Lower CAC by killing channels with pretty clicks and ugly conversion.
- Extend LTV with margin and retention before betting the company on the ratio.
- Pair with payback and cash on hand—profitable on paper can still feel broke.
Recommended tools
- Baremetrics SaaS metrics and subscription analytics dashboards.
- ChartMogul Subscription analytics for revenue, churn, and cohort reporting.
- Google Ads Help Official documentation for campaign structure and measurement basics.
- Shopify Commerce platform for building and scaling an online store.
FAQ
- Is 3× always healthy?
- No single bar fits every margin profile or sales cycle—treat context seriously.
- Why ratio up but payback awful?
- LTV horizon may be long while cash recovery is slow—check payback months.
- Mismatch inputs?
- Blending enterprise LTV with SMB CAC fabricates false comfort.
- Does this include expansion?
- Only if your LTV model already captured expansion ARR.
- Downside of high ratio?
- Sometimes underinvestment in growth—ratio alone cannot say.
Related calculators
CAC Payback Period Calculator
Months to recover CAC using monthly gross profit per account (ARPU × margin unless you enter profit directly).
Open calculator →LTV Calculator (Simple Gross Margin Adjusted)
Simplified annuity-style gross LTV using ARPA, margin, and churn in shared time units.
Open calculator →Affiliate disclosure
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