What is the LTV to CAC ratio?
It is lifetime value divided by customer acquisition cost. The calculator uses the inputs you provide. It does not fetch your finance system.
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LTV CAC ratio calculator
Calculate CAC, a simple lifetime value, and the LTV-to-CAC ratio from your inputs.
Not sure what to enter? Start with a complete example.Fill the form in one click, run it as-is, or edit the example into your own business.
Runs locally
Example output
Sample inputs, not a benchmark: 2,000 spent to acquire customers, 10 new customers, so CAC is 200. If lifetime gross profit per customer is 800, LTV divided by CAC is 4. The LTV CAC ratio calculator reports that ratio from the inputs. It does not tell you that 4 is the right target for your margin or payback window.
How to use it
- Enter acquisition spend and the count of new customers from the same definition.
- Enter the revenue and cost assumptions you use for lifetime value.
- Run the LTV CAC ratio calculator and read CAC, LTV, and the ratio separately.
- Write down the payback window you still need to check outside this ratio.
FAQ
Should every business target the same ratio?
No. A ratio that is comfortable for a high-margin subscription can be wrong for a low-margin product or a long payback period.
What if sales cost is missing from CAC?
Then CAC is understated. Include the sales and marketing spend that was required to win those customers, or label the result as marketing CAC only.
Sources
- No external benchmark is attached CAC is marketing and sales spend divided by new customers. LTV is average order value times purchases per year times retention years, which is revenue, not gross profit. The ratio is LTV divided by CAC. A 3:1 target is not used: no primary study is cited for it. Verify by repeating those three calculations.
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