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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