# LTV to CAC Ratio Calculator

> Divide customer lifetime value (gross profit) by acquisition cost to get the LTV:CAC ratio, net value per customer and CAC payback in months.

Category: Marketing analytics · Applies to: Worldwide · Last updated: 2026-10-29
Interactive calculator: https://calculators.geekmidst.com/calculators/ltv-cac-ratio-calculator

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.

## Inputs
- Customer lifetime value (gross profit) (default 900)
- Customer acquisition cost (default 300)
- Gross profit per customer per month (default 25; optional)
- Currency

## Results
- LTV:CAC ratio
- Net value per customer (LTV − CAC)
- CAC payback

## Formula

```
LTV:CAC = LTV ÷ CAC;  Net value = LTV − CAC;  Payback (months) = CAC ÷ Monthly gross profit per customer
```

Where:
- LTV: lifetime gross profit per customer
- CAC: total acquisition cost ÷ new customers
- Monthly gross profit: revenue per customer per month × gross margin

## Worked example
1. LTV:CAC = 900 ÷ 300 = 3×.
2. Net value = 900 − 300 = $600.
3. Payback = 300 ÷ 25 = 12 months.

**Result:** Each customer returns 3× their $300 acquisition cost, and the cost is recovered after 12 months.

## What the result means

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 and limits
- LTV is measured in gross profit, not revenue.
- Payback assumes the same gross profit every month.
- The ratio is only as good as the lifetime estimate, which is often the weakest number.

## Questions

### What if my LTV is based on revenue?

Multiply it by your gross margin first. A revenue-based ratio overstates unit economics.

### Why does payback matter if the ratio is good?

A long payback ties up cash. A 5× ratio that takes 40 months to recover CAC can still strain a growing business.

## Related calculators
- [Customer Lifetime Value Calculator](https://calculators.geekmidst.com/calculators/customer-lifetime-value-calculator)
- [Customer Acquisition Cost Calculator](https://calculators.geekmidst.com/calculators/customer-acquisition-cost-calculator)
- [ROI Calculator](https://calculators.geekmidst.com/calculators/roi-calculator)
- [Ratio Calculator](https://calculators.geekmidst.com/calculators/ratio-calculator)

Source: GM¹X CalcVerse — https://calculators.geekmidst.com/calculators/ltv-cac-ratio-calculator