FINBIZTOOLS
LTV:CAC Calculator
Calculate the LTV:CAC ratio by entering a customer lifetime value (LTV) and customer acquisition cost (CAC) you already have or have calculated elsewhere.
Private by design · Entries and logos stay in this browser. Nothing is saved automatically.
Changes the currency symbol and number format only. Amounts are not converted.
How to use the LTV:CAC Calculator
- Enter the customer lifetime value (LTV), calculated here or elsewhere.
- Enter the customer acquisition cost (CAC), calculated here or elsewhere.
- Select Calculate to see the LTV:CAC ratio.
Use the currency selector above the inputs to change the symbol. It changes the display only and does not convert amounts.
What is the LTV:CAC ratio?
The LTV:CAC ratio compares how much value a customer generates (LTV) against how much it cost to acquire them (CAC), expressed as a single ratio.
It is a widely used, informal indicator of whether acquisition spend is proportionate to customer value, though the right ratio depends heavily on business model, growth stage and payback-period goals.
How the calculation works
LTV:CAC formula
LTV:CAC ratio = LTV ÷ CAC
- LTV is customer lifetime value — use the LTV Calculator if you don't already have this figure.
- CAC is customer acquisition cost — use the CAC Calculator if you don't already have this figure.
A commonly cited reference point in SaaS discussion is a ratio of roughly 3:1 or higher, but this is general commentary, not a rule, a target, or advice tailored to your business.
LTV:CAC calculation example
LTV of 1,600 and CAC of 500:
| LTV | 1600 |
|---|---|
| CAC | 500 |
| Customer lifetime value (LTV) | 1600 |
|---|---|
| Customer acquisition cost (CAC) | 500 |
| LTV:CAC ratio | 3.2 |
A ratio of 3.2 means the estimated lifetime value is about 3.2 times the acquisition cost. Amounts are shown without a currency symbol; the currency selector only changes the symbol and number format.
Assumptions and limitations
Assumptions
- LTV and CAC are single figures you supply, computed on a consistent basis (for example, both per-customer, both gross-margin-adjusted).
- The ratio treats LTV and CAC as already-calculated inputs; it does not recompute either from underlying revenue or spend data itself.
Limitations and why results can differ
- The ratio is only as reliable as the LTV and CAC figures entered; both are themselves estimates built on assumptions.
- It does not account for the time period over which LTV is realized versus when CAC is spent (a related concept is CAC payback period, which this calculator does not compute).
Frequently asked questions
What is considered a good LTV:CAC ratio?
There is no single universally correct answer; it depends on your industry, growth stage and how quickly you need to recover acquisition cost. A commonly cited general reference point in SaaS discussion is around 3:1, offered here as informational context, not a target.
Can the ratio be too high?
A very high ratio can sometimes suggest underinvestment in growth rather than pure efficiency, but that depends heavily on context this calculator does not have visibility into.
Where do I get my LTV and CAC figures?
Use the LTV Calculator and CAC Calculator if you don't already have them, then enter the results here.
Does this calculator recommend a target ratio for my business?
No. It calculates the ratio from your entered figures and provides general informational context, not personalized advice or a recommended target.
Methodology
LTV (0 to 1,000,000,000,000) and CAC (0.01 to 1,000,000,000,000, so a division by exactly zero is rejected) are each validated as entered figures, not recomputed from underlying revenue or spend data.
The ratio is LTV ÷ CAC, computed directly. The calculation runs in your browser and inputs are not sent to a server.
Last reviewed:
Disclaimer
Results are calculated estimates based on the figures you enter. They are not accounting, pricing, tax or legal advice. Verify important business and pricing decisions with your own records and a qualified professional. Read the full Disclaimer.
Explore this topic
This tool is part of SaaS and Startup Metrics.
A common order: measure recurring revenue and churn, compare customer value with acquisition cost, then check runway.
- MRR Calculator
- LTV:CAC Calculator (this page)
- Runway Calculator