The method
How it is worked out
LTV:CAC = customer lifetime value ÷ customer acquisition cost
- LTV
- Estimated customer lifetime value
- CAC
- Customer acquisition cost
LTV:CAC Ratio Calculator
Compare customer lifetime value with acquisition cost and calculate the LTV:CAC ratio. The result updates as you type so you can compare scenarios quickly.
Keep in mind
What it leaves out
- Model qualityA weak LTV estimate makes the ratio weak.
- Payback timingThe ratio does not show how quickly CAC is recovered.
- CohortsDifferent channels and customer cohorts can have very different economics.
Use the calculator to compare scenarios rather than as a guaranteed forecast.
About the LTV:CAC Ratio Calculator
Compare the estimated lifetime gross profit from a customer with the cost of acquiring that customer. Founders can use LTV:CAC as a quick unit-economics check when deciding whether a sales channel warrants further testing.
How it works and an example to tryShow less
How to use the result
Divide the LTV amount you enter by the CAC amount you enter to obtain the ratio. The result is only as credible as the underlying LTV and CAC calculations: margin, churn, channel attribution and acquisition overhead matter. The ratio does not tell you how quickly acquisition spend is recovered in cash.
Example to try
Use an illustrative LTV of 3,600 and CAC of 1,000. Then increase CAC while holding LTV constant to see how the relationship changes. Test real cohorts separately before treating one blended ratio as proof that every marketing channel works.
Put it to work
Try it on a real situation
Load an example
What moves the result most
Worked out from your figures above. Tap a row to try it.
Who uses it, and when
Founders and investors using a quick unit-economics check, growth teams deciding which channel to scale, and boards asking whether marketing spend is creating or destroying value.
Mistakes worth avoiding
- Trusting a blended ratio when one channel is excellent and another is losing money.
- Ignoring payback period; a good ratio can still take three years to recover in cash.
- Treating three-to-one as a universal rule regardless of stage or margin.
Questions
What does the LTV:CAC Ratio Calculator do?
Compare customer lifetime value with acquisition cost and calculate the LTV:CAC ratio.
How should I use the result?
Divide the LTV amount you enter by the CAC amount you enter to obtain the ratio. The result is only as credible as the underlying LTV and CAC calculations: margin, churn, channel attribution and acquisition overhead matter. The ratio does not tell you how quickly acquisition spend is recovered in cash.
Does TechBullion store the information I enter?
The core calculation or transformation runs in your browser. Normal website security and analytics may still record page-level events, but the tool does not need to create a public record from your inputs.
What mistakes do people make with a ltv:cac ratio calculator?
Trusting a blended ratio when one channel is excellent and another is losing money. Ignoring payback period; a good ratio can still take three years to recover in cash. Treating three-to-one as a universal rule regardless of stage or margin.
Is the result guaranteed?
No. Use the result as a practical check or planning aid and verify important decisions with the relevant primary source, provider or professional advice.
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Calculator results are estimates based on the figures entered and are not financial, investment, legal or tax advice.