About this tool
LTV:CAC Ratio Calculator is a free, in-browser tool that measures the core unit economics of a business: how much a customer is worth over their lifetime (LTV) against what it costs to acquire one (CAC). Every figure is computed locally as you type — nothing is uploaded.
CAC is total sales and marketing spend divided by new customers acquired. Lifetime value is ARPU × gross margin % × customer lifespan in months. You can enter lifespan directly, or switch to churn mode where the tool converts a monthly churn rate into an average lifespan of 100 ÷ churn% months (a 5% monthly churn implies a 20-month lifespan). The headline ratio is LTV ÷ CAC, and CAC payback is CAC ÷ (ARPU × margin %) — the months of margin needed to earn the acquisition cost back.
Use it to sanity-check growth spending: a ratio of 3:1 or higher is generally considered healthy, 1:1 to 3:1 workable but tight, and below 1:1 means you lose money on every customer. Set gross margin to 100% if you want a revenue-based LTV instead of a margin-based one.
Frequently asked questions
How does churn mode convert to a customer lifespan?
Average lifespan in months equals 100 divided by the monthly churn percentage. A 4% monthly churn implies customers stay 100 ÷ 4 = 25 months on average, which the tool then multiplies by margin-adjusted ARPU to get LTV. Switch to lifespan mode to enter the months directly.
What counts as a healthy LTV:CAC ratio?
A common rule of thumb is 3:1 — a customer is worth about three times what you paid to acquire them. The verdict tile flags 3:1 and above as healthy, 1:1 to 3:1 as workable but thin, and below 1:1 as losing money on each customer. These are guidelines, not hard limits.
Should I include gross margin?
For a true LTV you should: a customer paying 50 a month at 70% gross margin only contributes 35 of margin. Enter your gross margin percentage to base LTV and payback on profit. Leave it at 100% to compute a simpler revenue-based lifetime value.
Is my business data kept private?
Yes. Costs, revenue, churn and customer counts are all processed in your browser and never leave your device — the tool works offline and uploads nothing.
More tools