{
    "name": "LTV to CAC Ratio Calculator",
    "url": "https://calculators.geekmidst.com/calculators/ltv-cac-ratio-calculator",
    "markdown": "https://calculators.geekmidst.com/calculators/ltv-cac-ratio-calculator.md",
    "category": "Marketing analytics",
    "description": "Divide customer lifetime value (gross profit) by acquisition cost to get the LTV:CAC ratio, net value per customer and CAC payback in months.",
    "summary": "The LTV:CAC ratio compares what a customer is worth in gross profit with what it cost to acquire them. A ratio of 3 means each customer returns three times their acquisition cost.",
    "also_called": [
        "LTV:CAC calculator",
        "CAC payback calculator"
    ],
    "applies_to": "Worldwide",
    "last_updated": "2026-10-29",
    "computation": "Results are computed in the visitor’s browser on the HTML page. This API describes the calculator; it does not compute results.",
    "inputs": [
        {
            "name": "ltv",
            "label": "Customer lifetime value (gross profit)",
            "type": "number",
            "default": "900"
        },
        {
            "name": "cac",
            "label": "Customer acquisition cost",
            "type": "number",
            "default": "300"
        },
        {
            "name": "monthly_gross_profit",
            "label": "Gross profit per customer per month",
            "type": "number",
            "default": "25",
            "optional": true
        },
        {
            "name": "currency",
            "label": "Currency",
            "type": "currency",
            "default": "USD"
        }
    ],
    "outputs": [
        {
            "key": "ratio",
            "label": "LTV:CAC ratio",
            "format": "multiple"
        },
        {
            "key": "net_value",
            "label": "Net value per customer (LTV − CAC)",
            "format": "currency"
        },
        {
            "key": "payback_months",
            "label": "CAC payback",
            "format": "number"
        }
    ],
    "formula": {
        "text": "LTV:CAC = LTV ÷ CAC;  Net value = LTV − CAC;  Payback (months) = CAC ÷ Monthly gross profit per customer",
        "variables": {
            "LTV": "lifetime gross profit per customer",
            "CAC": "total acquisition cost ÷ new customers",
            "Monthly gross profit": "revenue per customer per month × gross margin"
        }
    },
    "worked_example": {
        "inputs": {
            "ltv": "900",
            "cac": "300",
            "monthly_gross_profit": "25",
            "currency": "USD"
        },
        "steps": [
            "LTV:CAC = 900 ÷ 300 = 3×.",
            "Net value = 900 − 300 = $600.",
            "Payback = 300 ÷ 25 = 12 months."
        ],
        "result": "Each customer returns 3× their $300 acquisition cost, and the cost is recovered after 12 months."
    },
    "interpretation": "Below 1, every new customer loses money. Many investors quote about 3 as a healthy rule of thumb, but the right level depends on your overheads, cash position and how reliable the lifetime estimate is. Payback tells you how long cash is tied up per customer.",
    "assumptions": [
        "LTV is measured in gross profit, not revenue.",
        "Payback assumes the same gross profit every month."
    ],
    "limitations": [
        "The ratio is only as good as the lifetime estimate, which is often the weakest number."
    ],
    "rules": null,
    "faqs": [
        {
            "question": "What if my LTV is based on revenue?",
            "answer": "Multiply it by your gross margin first. A revenue-based ratio overstates unit economics."
        },
        {
            "question": "Why does payback matter if the ratio is good?",
            "answer": "A long payback ties up cash. A 5× ratio that takes 40 months to recover CAC can still strain a growing business."
        }
    ],
    "sources": [],
    "related": [
        {
            "name": "Customer Lifetime Value Calculator",
            "url": "https://calculators.geekmidst.com/calculators/customer-lifetime-value-calculator"
        },
        {
            "name": "Customer Acquisition Cost Calculator",
            "url": "https://calculators.geekmidst.com/calculators/customer-acquisition-cost-calculator"
        },
        {
            "name": "ROI Calculator",
            "url": "https://calculators.geekmidst.com/calculators/roi-calculator"
        },
        {
            "name": "Ratio Calculator",
            "url": "https://calculators.geekmidst.com/calculators/ratio-calculator"
        }
    ],
    "disclaimer": null,
    "publisher": "GM¹X CalcVerse"
}