Baremetrics
SaaS metrics and subscription analytics dashboards.
Visit tool →LTV:CAC Ratio Calculator
Estimated LTV ÷ estimated CAC using definitions you already aligned between teams.
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.
Overview
Use as a quick multiple check—not a growth mandate. Payback, working capital, and margin quality still decide whether you can scale.
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.
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.
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
Useful tools for this calculator
These tools are related to the topic of this calculator. Some links may be partner links.
ChartMogul
Subscription analytics for revenue, churn, and cohort reporting.
Visit tool →Google Ads Help
Official documentation for campaign structure and measurement basics.
Visit tool →Shopify
Partner linkCommerce platform for building and scaling an online store.
Visit tool →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 Calculator
Sales + marketing spend in a slice ÷ newly acquired customers counted the same window.
Open calculator →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
Disclosure: Some links on this page may be affiliate links. If you sign up or make a purchase through these links, FounderCalc may earn a commission at no extra cost to you. We only recommend tools that are relevant to the calculator topic.