Quick answer
How do you calculate LTV to CAC Ratio?
Use LTV:CAC ratio = Customer lifetime value ÷ Customer acquisition cost. Enter the matching values above to calculate the result instantly.
What it measures
Understanding LTV to CAC Ratio
Compare customer lifetime value with customer acquisition cost. Using revenue LTV with fully loaded CAC overstates economics; the numerator and denominator should reflect compatible cost scopes.
Interpretation
What the result means
A 3.00× ratio means estimated lifetime value is three times the acquisition cost.
Action
How to use it
Review the ratio with CAC payback, retention, cohort maturity, and the cash required to finance growth.
Limits
What it leaves out
LTV depends on uncertain long-term retention and margin assumptions, so early-stage ratios can appear more precise than they are.
The math
LTV to CAC Ratio formula
Worked example
Example calculation
- Calculation
- $3,600 ÷ $1,200
- Result
- 3.00× LTV:CAC
Step by step
How to use this calculator
- 1Enter customer lifetime value, customer acquisition cost.
- 2Keep every input on the same time period and measurement basis.
- 3Review the result, then change one assumption at a time to test scenarios.
Decision support
When this calculator is useful
- Unit-economics reviews
- Channel allocation
- Fundraising metrics
Common questions
Frequently asked questions
Which inputs should I use for LTV to CAC Ratio?
Use customer lifetime value, customer acquisition cost, measured from the same source and period. Include only values that match the definitions shown beside each field.
Why might two LTV to CAC Ratio calculations differ?
The systems or accounting policies may define customer lifetime value, customer acquisition cost differently. Compare the time period, scope, source, and treatment of exceptional items before comparing results.
How often should I recalculate LTV to CAC Ratio?
Recalculate when any input changes materially and on the same reporting cadence used for the decision. Save the source and date of each input so the trend remains comparable.
Can I use LTV to CAC Ratio by itself?
No single metric captures the full decision. Use the result with the related measures, assumptions, and limitations shown on this page.
Calculation reviewed: 2026-06-18. CalcPilot uses the formula shown above and tests representative values during the production build. See our methodology and correction policy.
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