LTV:CAC Ratio Calculator

About this calculator

This calculator computes the LTV:CAC ratio — customer lifetime value divided by customer acquisition cost — a core SaaS and subscription-business metric popularized in growth and venture-capital circles (notably by SaaS investor David Skok) as a proxy for whether a business's growth engine is fundamentally profitable. A ratio around 3:1 is the widely cited rule-of-thumb benchmark: below that, a company may be spending too much to acquire customers relative to what they're worth; well above it (say, 5:1 or higher) can actually signal under-investment in growth.

SaaS founders track this ratio to decide how aggressively to spend on sales and marketing, venture capital investors use it during due diligence to judge unit economics before funding, and growth and finance teams monitor it over time to catch a deteriorating acquisition efficiency before it shows up in the bottom line.