LTV:CAC Ratio Calculator
Compare customer lifetime value against acquisition cost to judge unit economics.
What the LTV:CAC Ratio Calculator does
The LTV:CAC ratio is the core test of a subscription business. Three-to-one is the accepted benchmark: enough margin to cover overheads and fund growth. Below one, growth actively destroys value.
Formula
LTV:CAC = Lifetime value ÷ Acquisition costPayback period = CAC ÷ Monthly gross profit per customer
Inputs explained
| Input | Unit | Required | Notes |
|---|---|---|---|
| Customer lifetime value | selected currency | Yes | Accepts more than 0. |
| Customer acquisition cost | selected currency | Yes | Accepts more than 0. |
| Monthly gross profit per customer | selected currency | Optional | Optional — calculates the payback period. Accepts 0 or more. |
| Currency | one of 10 options | Optional | — |
How to use it
- Choose Currency.
- Enter Customer lifetime value and Customer acquisition cost.
- Optionally add Monthly gross profit per customer.
- Select Calculate.
Worked example
An LTV of $2,400 against a CAC of $650, with $95 monthly gross profit.
- LTV
- 2400
- CAC
- 650
- Monthly profit
- 95
3.69:1 ratio — healthy, with a 6.8-month payback.
Frequently asked questions
Can the ratio be too high?
Yes. A ratio of 8:1 often means you could profitably spend far more on acquisition and are leaving growth on the table.
Why does payback period matter separately?
Because it drives cash flow. A great lifetime ratio is little comfort if it takes three years to recover the acquisition cost.