LTV to CAC Ratio Calculator
Compare customer lifetime value with acquisition cost to judge unit economics.
About the LTV to CAC Ratio Calculator
Enter customer lifetime value (gross profit per customer over their lifetime), customer acquisition cost and monthly gross profit per customer. The calculator gives the LTV:CAC ratio and how many months it takes to earn back the acquisition cost.
The ratio shows how much gross profit each customer returns for every unit spent to acquire them. Around 3:1 is a widely used benchmark for subscription businesses, with CAC paid back within 12 months.
The formula
Ratio = LTV ÷ CAC; payback = CAC ÷ monthly gross profit per customer
Worked example
LTV 1,200; CAC 400; 35 gross profit a month per customer
- Ratio: 1,200 ÷ 400 = 3 : 1
- Payback: 400 ÷ 35 = 11.4 months
- Healthy on both benchmarks
Questions people ask
Is higher always better?
Very high ratios can mean you could grow faster by spending more.
Which LTV?
Gross-margin-based LTV, ideally by acquisition channel.
What goes into CAC?
All sales and marketing spend for the period ÷ new customers won in it.