Business calculator

CAC / LTV Calculator

Estimate acquisition cost, customer lifetime value, and the LTV:CAC ratio.

Your inputs

Sales & marketing spendNew customers acquiredAverage revenue per customerGross marginAverage customer lifespan (months)

Result

Customer acquisition cost: $100.00
Estimated lifetime value: $400.00
LTV:CAC ratio: 4 : 1
Interpretation: Each $1 of acquisition cost corresponds to an estimated $4.00 of customer lifetime value.

Results are estimates for planning and educational purposes.

How Do You Calculate Customer Acquisition Cost?

Divide sales and marketing spending by customers acquired in the same period. Include the channels and team costs consistently so the numerator and customer cohort match.

How Do You Calculate Customer Lifetime Value?

This estimate multiplies revenue per customer by gross margin and expected customer lifespan. Because lifespan and future behavior are assumptions, LTV should be updated as real cohort data develops.

What Does the LTV:CAC Ratio Mean?

The ratio compares modeled customer value with acquisition cost. It is a directional unit-economics measure, not a universal benchmark or a guarantee of cash flow.

Formula

CAC = Sales and marketing spend ÷ New customers
LTV = Revenue per customer × Gross margin × Customer lifespan
LTV:CAC ratio = LTV ÷ CAC

Example

A $100 CAC and $400 estimated LTV produces a 4.0:1 ratio. Appropriate ratios vary by industry and business stage.