Free Calculator
LTV:CAC Ratio Calculator
Enter your customer lifetime value and acquisition cost to instantly see your ratio and whether your growth is actually profitable.
- Two inputs
- Runs in your browser
- Plain-English verdict
Runs entirely in your browser — free, private, no sign-up.
The one number that says whether growth is working
A business can grow revenue every month and be getting steadily worse. If each new customer costs more to acquire than they will ever be worth, growth accelerates the problem rather than solving it — and the monthly revenue chart looks great right up until it does not.
The LTV:CAC ratio is the check. Enter two numbers and get the answer.
Reading your result
The ratio lands in one of four bands, and the band matters more than the decimal. Take an illustrative subscription business growing subscribers 20% a quarter and still needing funding: it might assume it has a scale problem, but counted properly it sits at 1.4:1, paying almost as much for customers as they are worth.
- Below 1:1 — you lose money on every customer. Growth makes it worse, and no volume fixes it.
- 1:1 to 2:1 — thin. Technically positive, but a small rise in acquisition costs or a dip in retention puts you underwater.
- Around 3:1 — the widely cited healthy benchmark. Each customer returns roughly three times what they cost.
- Above 5:1 — often under-investing in growth rather than a triumph. A competitor will eventually spend where you are not.
Gross-profit LTV ÷ fully-loaded CAC
The illustrative business from the paragraph beside this.
Both inputs are easy to flatter
The ratio is only as honest as the numbers you feed it, and both are commonly overstated. A flattering 4:1 built from revenue-based LTV and ad-spend-only CAC can be a genuine 1.5:1.
- LTV inflation happens when people use revenue instead of gross profit, or assume a customer lifespan longer than any evidence supports.
- CAC understatement happens when only ad spend is counted. Real CAC includes sales and marketing salaries, tools, agency fees and content costs.
- Run it honestly, because the ratio only helps if it can tell you bad news.
Only two levers exist
And they are not equally easy. Most teams reach for CAC first because it feels controllable — cut spend, negotiate rates, pause the worst channel. Retention usually moves the ratio more, because it lifts the numerator for every customer you already have as well as every future one.
- Lower CAC — immediate, visible, and capped. There is a floor below which you simply stop acquiring.
- Raise LTV — slower to show up, but it compounds across the whole base.
- Fix churn first, then scale once the ratio supports it.
Two inputs, and nothing else
The ratio, both figures and a plain-English verdict appear instantly. Everything runs in your browser.
- Customer Lifetime Value — total gross profit you expect from a customer over the relationship. Gross profit, not revenue.
- Customer Acquisition Cost — total sales and marketing spend divided by customers acquired.
- Nothing is uploaded and there is no sign-up, so real figures can go in.
- 1Enter gross-profit LTVTotal profit expected across the whole relationship.
- 2Enter fully-loaded CACAll sales and marketing spend, divided by customers acquired.
- 3Read the band, not the decimalLosing, thin, healthy, or under-investing.
Four numbers worth keeping
Why Parix.ai gives this away
We build SaaS products and growth systems for a living. These tools are the same checks we run for clients, put on a public page. They are how people find us — which is the whole reason there is no paywall, no trial and no sign-up on any of them.
Run my numbersWho uses it
Founders assessing whether growth is sustainable. Marketing leads justifying budget. Investors reviewing unit economics. Anyone growing steadily and running out of cash.
Get the inputs right
The LTV Calculator and the CAC Calculator feed this one, and the Churn Rate Calculator checks the retention behind it.
Built to move the number
Our SaaS product development team builds the product and growth systems that shift this ratio, rather than reporting on it after the fact.