LTV-to-CAC ratio: Comparing Customer Value with Acquisition Cost
LTV-to-CAC compares an estimated customer lifetime contribution with the cost of acquiring that customer. Both inputs should describe the same customer cohort and compatible cost definitions.
Use the LTV-to-CAC ratio Calculator to enter your own figures and compare the result with the worked example below.
LTV-to-CAC ratio formula
LTV:CAC = Customer lifetime value ÷ Customer acquisition cost
Worked example
| Item | Example value |
|---|---|
| Customer lifetime value | 720 USD |
| Customer acquisition cost | 100 USD |
| LTV-to-CAC ratio | 7.2 |
These are illustrative inputs, not current prices, rates or recommended targets. Where a currency is shown, keep all comparable money amounts in the same currency; conversion examples identify the two sides separately.
How to interpret the result
A favorable ratio can still accompany a long cash payback period. Review retention uncertainty and the timing of contribution.
Related calculations
Method and further reading
The example follows the FinMathly calculator method. For broader background, see SEC: Understanding financial statements. The background resource may use jurisdiction-specific terms; it does not replace the assumptions of this calculator.
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