Free tool with optional AI assistance

Free LTV:CAC Ratio Calculator

Compare lifetime value with customer acquisition cost, then model how acquisition, margin and retention changes affect the ratio.

Related topicsCustomer acquisitionUnit economics
Unit economics calculator

Calculate the LTV:CAC Ratio

Use LTV and CAC from the same segment, period and margin basis.

Local calculation
Your unit-economics analysis will appear here

Enter LTV, CAC and optional scenario changes.

Practical guide

How to Use the LTV:CAC Ratio Calculator

LTV:CAC connects customer value with acquisition efficiency, but the ratio depends heavily on retention and attribution assumptions.

Build the complete cluster

Calculate inputs with the <a href="/customer-acquisition-cost-calculator/">CAC Calculator</a> and <a href="/customer-lifetime-value-calculator/">Customer Lifetime Value Calculator</a>.

Do not hide the value basis

Label whether LTV represents revenue, gross profit or contribution profit so stakeholders interpret the ratio correctly.

Formula and example

LTV:CAC Ratio Formula

LTV:CAC Ratio=Customer lifetime value ÷ customer acquisition cost
Illustrative unit economics
LTVCACRatioValue less CAC
$900$3003.0:1$600
Questions answered

LTV:CAC Ratio Calculator FAQs

How do you calculate LTV:CAC?

Divide customer lifetime value by customer acquisition cost. Keep both values on the same gross-margin or revenue basis.

What does a 3:1 LTV:CAC ratio mean?

It means estimated customer lifetime value is three times acquisition cost. It is a common reference point, not a universal target.

Can a ratio be too high?

Potentially. A very high ratio can indicate efficient acquisition or underinvestment in growth, depending on cash flow, capacity and measurement quality.

Why use margin-adjusted LTV?

Margin-adjusted LTV gives a more conservative view of how much customer value is available to recover acquisition cost.