LTV:CAC Ratio Calculator
Calculate your LTV:CAC ratio to compare lifetime gross profit per customer with acquisition cost.
Use LTV:CAC Ratio Calculator
The 1x and 3x cut-offs are an Infinall guideline, not a published benchmark. Free, no sign-up. Runs in your browser; nothing you enter is uploaded.
How to use it
Compare lifetime gross profit with acquisition cost per customer, in the same currency. The ratio shows lifetime return, not payback time. Changing currency changes labels, not amounts.
- Enter lifetime gross profit per customer (LTV).
- Enter acquisition cost per customer (CAC).
- Compare the ratio with your margins and cash needs.
Formula
LTV:CAC ratio = lifetime gross profit per customer ÷ acquisition cost per customer
Verdicts use the ratio rounded to 2 decimal places
Example
Software firm, Pune
An Indian software firm covers acquisition cost with a thin cushion.
- Lifetime value (LTV)
- ₹2,16,000
- Acquisition cost (CAC)
- ₹84,500
Questions
What is a good LTV:CAC ratio?
Below 1.00x, cost exceeds lifetime gross profit; 1.00x to under 3.00x covers cost with a thin cushion; 3.00x or more returns at least three times acquisition cost. Compare this with your margins, retention assumptions and cash needs.
What does the LTV:CAC ratio tell you?
A 2.56x ratio means each unit of acquisition cost returns 2.56 units of lifetime gross profit. Use the CAC payback calculator to check how long repayment takes.
Why can't CAC be 0?
Division by zero is undefined. CAC must be above zero after rounding to two decimal places. If some customers arrive free, use total sales and marketing spend divided by all new customers in the period.
Where do I find my LTV and CAC?
Use the LTV calculator with order value, purchase frequency, retention and margin, or monthly revenue, margin and churn. Use gross profit, not revenue. Use the CAC calculator for sales and marketing spend divided by new customers in the same period. Both values must be per customer.
How is the Pune example calculated?
₹6,000 monthly gross profit × 36 months = ₹2,16,000 LTV; ₹1,69,00,000 acquisition spend ÷ 200 clients = ₹84,500 CAC. The ratio is 2.56x. For 3x, LTV must rise to ₹2,53,500 or CAC fall to ₹72,000.
How is the US example calculated?
$65 monthly gross profit × 24 months = $1,560 LTV; $49,200 acquisition spend ÷ 120 accounts = $410 CAC. The ratio is 3.80x. This is a separate business, not a currency conversion.
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