LTV to CAC Ratio Calculator

Divide lifetime value by acquisition cost to test whether growth is economically sustainable.

About LTV to CAC Ratio Calculator

The ratio divides one figure by the other and is read against a conventional benchmark of 3. Both the ratio and its percentage form are shown, because different audiences expect different presentations of the same number. A unit-economics ratio compresses two absolute figures into one comparable number, which is what makes it usable across companies and periods of different size.

Formula

LTV to CAC Ratio

LTV to CAC Ratio = Customer lifetime value ÷ Customer acquisition cost

Customer lifetime value: Numerator of the ratio
Customer acquisition cost: Denominator of the ratio

Worked example

With the default values below, LTV to CAC Ratio Calculator returns LTV to CAC Ratio of 7.800. Change any input above and every figure here is recalculated in your browser.

Inputs used

Customer lifetime valueminimum 0: 3,900
Customer acquisition costminimum 0: 500

Results

LTV to CAC Ratio: 7.800
Expressed as a Percentage: 780.00%
Surplus Over the Benchmark: 4.800
Inverse Ratio: 0.128
Interpretation: Strong — comfortably above the sustainable benchmark of 3

Step by step

1Values used
2LTV to CAC Ratio
3LTV to CAC Ratio= 7.800
4Expressed as a Percentage= 780.00
5Surplus Over the Benchmark= 4.800
6Inverse Ratio= 0.128
7Interpretation= Strong — comfortably above the sustainable benchmark of 3

Assumptions and limits

The result is derived only from the 2 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax or compounding frequency into account.
Figures are rounded for display to 3 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How is LTV to CAC Ratio calculated?

LTV to CAC Ratio = Customer lifetime value ÷ Customer acquisition cost The ratio divides one figure by the other and is read against a conventional benchmark of 3. Both the ratio and its percentage form are shown, because different audiences expect different presentations of the same number.

Why does LTV to CAC Ratio matter?

A unit-economics ratio compresses two absolute figures into one comparable number, which is what makes it usable across companies and periods of different size.

What values do I need to enter?

This calculator takes 2 inputs: Customer lifetime value, Customer acquisition cost. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.