Free LTV:CAC Ratio Calculator
Compare lifetime value with customer acquisition cost, then model how acquisition, margin and retention changes affect the ratio.
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.
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Calculate inputs with the CAC Calculator and LTV Calculator.
Do not hide the value basis
Label whether LTV represents revenue, gross profit or contribution profit so stakeholders interpret the ratio correctly.
LTV:CAC Ratio Formula
| LTV | CAC | Ratio | Value less CAC |
|---|---|---|---|
| $900 | $300 | 3.0:1 | $600 |
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.