LTV CAC Ratio Calculator

LTV:CAC benchmark: below 1 means the company is losing money on acquisition, 1–3 is weak, 3–5 is healthy, and 5+ is strong but may also indicate under-investment in growth.

How this calculator works

This ltv cac ratio calculator is designed for SaaS, subscription, and recurring-revenue businesses. Enter your current operating numbers to get a fast directional result.

LTV:CAC ratio = customer lifetime value ÷ customer acquisition cost

Keep the reporting period consistent. Monthly metrics should use monthly revenue, monthly churn, and monthly acquisition counts.

How to use it

Use clean finance or analytics data from the same period.
Exclude one-time revenue when calculating recurring revenue metrics.
Compare the result against prior months to see trend direction, not just one snapshot.

Result interpretation

A common SaaS target is around 3:1. Below 1:1 usually means acquisition is destroying value; far above 5:1 can mean the company may be under-investing in growth.

LTV:CAC benchmark

Health score: below 1 is unsustainable, 1–3 is risky, 3–5 is healthy, and 5+ is excellent. A very high ratio can also mean you may be under-investing in growth.

FAQ

What is LTV CAC ratio?

It compares the value of a customer with the cost to acquire that customer.

Is 3:1 always good?

It is a common benchmark, but the right target depends on cash flow, market stage, and retention quality.

How should I use this result?

Use it as a quick operating metric, then compare it with cohort trends, cash flow, pricing changes, and acquisition channel quality.

Is this calculator exact accounting?

No. It is a planning calculator. Use consistent definitions from your finance reports when making board or investor decisions.