LTV to CAC Ratio Calculator
Replace the sample values with your own, in one currency and one reporting period. Enter percentages as whole numbers: 2 for 2%. Calculations run in your browser.
LTV:CAC Ratio = LTV / CAC | Variable | Meaning |
|---|---|
CAC | Customer acquisition cost. |
LTV | Customer lifetime value. |
Worked example
- LTV
- $30,000
- CAC
- $5,000
- → LTV:CAC Ratio
- 6
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What LTV to CAC Ratio measures
LTV to CAC Ratio compares customer lifetime value against customer acquisition cost to evaluate acquisition efficiency.
Prepare your inputs
- Choose revenue LTV or gross profit LTV, label it, and keep that definition consistent across comparisons.
- Match the LTV cohort or segment to the CAC cost pool. Separate enterprise sales from self-service acquisition if their economics differ.
- Divide LTV by CAC and show a conservative alternative using shorter retention or lower margin. Add payback months so the timing of recovery remains visible.
Formula
LTV:CAC Ratio = LTV / CAC | Variable | Meaning |
|---|---|
CAC | Customer acquisition cost. |
LTV | Customer lifetime value. |
Check the sample calculation
Worked example
- LTV
- $30,000
- CAC
- $5,000
- → LTV:CAC Ratio
- 6
Before using the result
- A 3× revenue-based ratio is not equivalent to a 3× gross-profit-based ratio.
- LTV is modeled over a customer lifetime while CAC is incurred near acquisition; the ratio does not tell you when cash returns.
- A zero CAC makes the ratio undefined. Organic acquisition often has people and content costs even if advertising spend is zero.
A dash means the result is undefined for the inputs, such as division by zero. Review the assumptions and input errors before interpreting it.
Read the LTV to CAC Ratio guide for a business scenario, interpretation, and frequently asked questions.
Sources and methodology
The references below explain the underlying methods. Our worked scenarios use hypothetical figures; they are not company results or current market benchmarks.
- Stripe: Customer lifetime value
Lifetime value methods and the role of gross margin.
- Bessemer: Scaling to $100 Million
Gross margin adjusted CAC payback and segment differences; historical research, not a current market benchmark.
Found an error or a definition that differs from your reporting? Send a correction with the page URL and the method you use.