LTV to CAC Ratio Calculator
The ratio, with payback beside it.
LTV to CAC
4.0:1
5.0 month payback
Payback matters as much as the ratio. A 4.0:1 return arriving in 5.0 months lets you reinvest quickly; the same ratio over three years does not, however good it looks.
How the LTV to CAC Ratio Calculator works
The 3:1 benchmark says nothing about when the money arrives. A 5:1 ratio spread over three years is a financing problem; a 3:1 ratio recovered in four months is a growth engine. Payback period belongs next to the ratio every time.
Not financial advice. Marketplace fees change, and they vary by country, plan and seller status. Every rate here is an editable default, not a quoted price — check the platform's current fee schedule before you price a product against it. This is not tax or business advice.
Frequently asked questions
What is a good LTV to CAC ratio?
Three to one is the common benchmark. Below 1:1 you lose money on every customer; much above 5:1 usually means you are under-investing in growth rather than running a great business.
Why does payback matter as much?
Because the ratio tells you the eventual return and the payback tells you how long you fund it. Fast-growing businesses fail on payback while their ratio looks excellent.
Should LTV be revenue or contribution?
Contribution, discounted. A revenue-based ratio compared against a fully loaded CAC compares two different things and always flatters.
How often should I recalculate?
Quarterly at least, by cohort. Both terms move — acquisition costs drift up as you scale and lifetime value changes as the customer mix shifts.