LTV to CAC Ratio Calculator
Divide lifetime value by acquisition cost. An LTV of 685,714 against a CAC of 180,000 is 3.81×, above the widely cited 3:1. The ratio leaves one thing out: when the money comes back. At 24,000 of gross profit per customer a month, 180,000 is recovered in 7.5 months. A 5× ratio with a 30-month payback turns into a question about where the cash comes from meanwhile.
Your numbers
LTV to CAC
3.81×
Months to recover CAC
7.5mo
CAC ceiling at 3:1
228,571
What it means
LTV is 3.81× CAC, above the commonly cited 3:1. The acquisition cost is recovered in 7.5 months.
Formula
LTV to CAC = Customer lifetime value ÷ Customer acquisition cost, Months to recover CAC = Customer acquisition cost ÷ Gross profit a customer a month
3:1 is not a rule but a convention from venture investing; a very high ratio is often read as underspending on growth. If the LTV was built on revenue rather than gross profit, this ratio is already inflated. The payback months must also divide gross profit, not revenue — and check first whether sales salaries and agency fees went into the CAC.
What to enter
| Input | Default | Accepted range |
|---|---|---|
| Customer lifetime valueTotal gross profit a customer leaves before churning, undiscounted. | 685,714 | 0 and up |
| Customer acquisition costWhat it cost to win one customer; what goes in the numerator varies by company. | 180,000 | 0 and up |
| Gross profit a customer a monthGross profit one customer leaves monthly, after hosting and payment fees. | 24,000 | 0 and up |
Step by step
Quick reference table
Results when only Customer lifetime value changes and everything else stays put.
| Customer lifetime value | LTV to CAC (×) | Months to recover CAC (mo) | CAC ceiling at 3:1 |
|---|---|---|---|
| 342,857 | 1.9 | 7.5 | 114,286 |
| 514,286 | 2.86 | 7.5 | 171,429 |
| 685,714 | 3.81 | 7.5 | 228,571 |
| 1,028,571 | 5.71 | 7.5 | 342,857 |
| 1,371,428 | 7.62 | 7.5 | 457,143 |
What each result means
| Result | At default values |
|---|---|
| LTV to CAC (×)Lifetime value over acquisition cost; it says nothing about when the money returns. | 3.81 |
| Months to recover CAC (mo)Months for gross profit to recover the acquisition cost. | 7.5 |
| CAC ceiling at 3:1The most you could spend per customer and still sit at 3:1. | 228,571 |
Common mistakes
3:1 is not a rule but a convention from venture investing; a very high ratio is often read as underspending on growth. If the LTV was built on revenue rather than gross profit, this ratio is already inflated. The payback months must also divide gross profit, not revenue — and check first whether sales salaries and agency fees went into the CAC.
Glossary
- Customer lifetime value
- Total gross profit a customer leaves before churning, undiscounted.
- Customer acquisition cost
- What it cost to win one customer; what goes in the numerator varies by company.
- Gross profit a customer a month
- Gross profit one customer leaves monthly, after hosting and payment fees.
- LTV to CAC
- Lifetime value over acquisition cost; it says nothing about when the money returns.
- Months to recover CAC
- Months for gross profit to recover the acquisition cost.
- CAC ceiling at 3:1
- The most you could spend per customer and still sit at 3:1.
Frequently asked questions
Q. How is LTV to CAC Ratio Calculator calculated?
LTV to CAC = Customer lifetime value ÷ Customer acquisition cost, Months to recover CAC = Customer acquisition cost ÷ Gross profit a customer a month — Divide lifetime value by acquisition cost. An LTV of 685,714 against a CAC of 180,000 is 3.81×, above the widely cited 3:1. The ratio leaves one thing out: when the money comes back. At 24,000 of gross profit per customer a month, 180,000 is recovered in 7.5 months. A 5× ratio with a 30-month payback turns into a question about where the cash comes from meanwhile.
Q. Can you walk through an example?
With Customer lifetime value 685,714, Customer acquisition cost 180,000, Gross profit a customer a month 24,000, the answer is LTV to CAC 3.81×.
Q. What do I need to enter?
Enter Customer lifetime value, Customer acquisition cost, Gross profit a customer a month. The result recalculates as you type, and an empty box counts as zero.
Q. How much does the answer move if I change a number?
Changing only Customer lifetime value moves the answer to Customer lifetime value 342,857 → LTV to CAC (×) 1.9 and Customer lifetime value 1,371,428 → LTV to CAC (×) 7.62. The table below lays out five steps.
Q. How are the numbers rounded?
Money is shown to the nearest whole unit, percentages to one decimal place and everything else to two. What you see is rounded; the calculation itself carries the unrounded value forward.
Q. Anything to watch out for?
3:1 is not a rule but a convention from venture investing; a very high ratio is often read as underspending on growth. If the LTV was built on revenue rather than gross profit, this ratio is already inflated. The payback months must also divide gross profit, not revenue — and check first whether sales salaries and agency fees went into the CAC.
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