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.

Formula & explanation

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

Practical example

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