LTV : CAC Calculator
What a customer is really worth over the whole relationship, against what one costs to acquire. The ratio that says whether growth is building or burning.
Free · no signup · last reviewed August 29, 2026
$1,500
Lifetime value (profit)
10.0 : 1
LTV : CAC ratio
Reading it: Room to spend more aggressively on acquisition.
The 3:1 “healthy” convention comes from SaaS practice and is our recommended floor for service businesses too. Below it, growth spends tomorrow’s profit. LTV here is contribution profit, not revenue, and assumes your retention estimate is honest; most owners overestimate years-retained on the first pass.
Methodology & honest limits
How it works: LTV = average sale × gross margin × purchases per year × years retained (contribution profit, not revenue). The ratio divides that by your cost to acquire a customer. The 3:1 healthy floor is the widely-used convention from SaaS finance, applied here as our recommended minimum for service businesses.
Honest limits: the output is only as good as the retention estimate, and first-pass retention estimates run optimistic. If you don’t know years-retained, compute it from real customer records before trusting the ratio. Or use the break-even calculator’s first-purchase math, which needs no forecast.
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