LTV CAC Calculator

Calculate the LTV:CAC ratio from customer lifetime value and acquisition cost.

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 this LTV CAC calculator to compare customer lifetime value with customer acquisition cost and estimate whether acquisition economics are healthy. SaaS founders and growth teams use it as a quick unit-economics check. Enter LTV and CAC; the result is the LTV:CAC ratio. Pair with payback or churn tools when you need cash timing, not just the headline multiple.

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

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.

Baremetrics

SaaS metrics and subscription analytics dashboards.

Visit tool →

ChartMogul

Subscription analytics for revenue, churn, and cohort reporting.

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Google Ads Help

Official documentation for campaign structure and measurement basics.

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Shopify

Partner link

Commerce platform for building and scaling an online store.

Visit tool →

FAQ

What is a good LTV:CAC ratio?
Many SaaS teams look for roughly 3:1 or better, but margin, payback, and sales cycle still matter.
How do you calculate LTV:CAC?
Divide customer lifetime value by customer acquisition cost. Use matching cohort definitions for both inputs.
Why does LTV:CAC matter?
It shows whether you earn enough from a customer over time to justify what you spent to acquire them.
Can LTV:CAC be too high?
Sometimes—it can mean you are under-investing in growth if payback is fine and demand is there.
Should expansion revenue sit in LTV?
Only if your LTV model already includes upsell and expansion. Do not mix definitions across teams.

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