CAC & LTV Calculator
Work out your Customer Acquisition Cost, Lifetime Value, the LTV:CAC ratio and CAC payback period — live, on one screen.
- Free — no sign-up
- Instant, on-screen results
- Built by our CA · CS team
- Rules cited on the page
Enter your figures — the result on the right updates as you type.
How the numbers are built
Get your unit economics reviewed by a CA
We help startups model CAC, LTV, burn and runway — and keep the books investor-ready.
Disclaimer: Indicative estimate based on the figures you enter. LTV here uses gross-margin contribution over an average lifespan and does not discount future cash flows. Benchmarks vary by industry and stage.
CAC & LTV — the two numbers that decide if growth is worth it
Customer Acquisition Cost (CAC) is what you spend to win one new customer. Lifetime Value (LTV) is the gross-margin profit that customer generates before they leave. If LTV is comfortably higher than CAC, every rupee of marketing builds value; if it is not, growth burns cash. The single most-watched signal is the LTV:CAC ratio, and the classic benchmark is 3:1.
How CAC and LTV are calculated
The maths is deliberately simple so you can sanity-check it. CAC divides all sales & marketing spend by the number of new customers won. LTV multiplies monthly revenue by your gross margin (to get contribution, not just revenue) and by how long a customer stays. Payback is CAC divided by the monthly margin one customer throws off.
Key terms explained
Customer Acquisition Cost (CAC)
Total sales & marketing spend ÷ new customers acquired in a period. Include ad spend, salaries, tools and commissions for a true, fully-loaded CAC — not just media cost.
Lifetime Value (LTV)
The gross-margin profit a customer generates over their life: monthly revenue × gross margin % × lifespan in months. Using margin (not raw revenue) keeps LTV honest.
The LTV:CAC 3:1 rule
Below 1:1 you lose money on every customer; 1–3:1 is workable but tight; 3:1 or higher is healthy. Much above 5:1 often means you are under-spending on growth.
CAC payback period
CAC ÷ monthly gross margin per customer — the number of months to earn back what you spent to acquire them. Under 12 months is generally strong for SaaS.
Gross margin
The share of revenue left after the direct cost of delivering your product or service. A ₹2,000 plan at 60% margin contributes ₹1,200 — that contribution, not the ₹2,000, is what funds LTV.
Questions people ask
Short answers on CAC & LTV Calculator. Tap a question to open it.
01What is customer acquisition cost (CAC)?
The total sales and marketing spend for a period divided by the number of new customers won in that period. Include ad spend, agency fees, sales salaries and commissions — not product or support costs.
02How is lifetime value (LTV) calculated?
LTV = average revenue per customer per month × gross margin × average number of months a customer stays. Using gross margin rather than revenue is what makes the ratio meaningful.
03What is a good LTV to CAC ratio?
Around 3:1 is the usual benchmark. Below 1:1 you lose money on every customer. Much above 5:1 often means you are under-investing in growth rather than running an unusually good business.
04What is CAC payback period?
The number of months of gross margin needed to recover the cost of acquiring a customer. Under 12 months is generally considered healthy for a subscription business.
05Should I calculate CAC by channel?
Yes. A blended CAC hides the fact that one channel may be highly profitable while another is not. Track CAC and LTV per channel and per cohort before you scale spend.
More Startup & Funding tools
Picked from the same shelf. Every tool is free and runs in your browser.
Disclaimer: This tool gives indicative results for general guidance only and is not professional advice. Please verify with a qualified CA before acting on the numbers.