Growth calculator
LTV:CAC Calculator
Estimate customer lifetime value, compare it with CAC, and see how churn, expansion, support costs, and discounting affect the ratio.
Results
Results are deterministic scenario outputs, not guarantees.
Enter values and calculate to see the summary, supporting metrics, warnings, and interpretation.
Interpretation
Deterministic interpretation rules will explain what the modeled result means once a calculation is available.
Detailed breakdown
Intermediate calculation rows will appear here after calculation.
Formula
Estimated customer lifetime
estimatedLifetimeMonths = min(1 / monthlyChurnRate, maximumLifetimeMonths)
Gross profit per customer-month
grossProfitPerCustomerMonth = averageRevenuePerCustomerPerMonth × grossMarginRate - supportCostPerCustomerPerMonth
Simple LTV
ltv = grossProfitPerCustomerMonth × estimatedLifetimeMonths + onboardingGrossProfit
Cohort gross profit
expectedGrossProfit(month) = survivalProbability(month) × (expandedRevenue(month) × grossMarginRate - supportCostPerCustomerPerMonth)
LTV:CAC ratio
ltvToCacRatio = estimatedLtv / cac
Assumptions
- Monthly revenue, gross margin, churn, expansion, support cost, and discount rate are deterministic scenario assumptions.
- Modeled lifetime is capped by maximum lifetime months to avoid extreme values from very low churn.
- Discounted LTV is used for the primary ratio when an annual discount rate is entered; otherwise the undiscounted cohort LTV is used.
- Outputs are planning scenarios, not forecasts or guarantees of customer behavior.
Worked example
Example: LTV:CAC ratio
If monthly revenue is $250, gross margin is 75%, support cost is $25, churn is 3%, and CAC is $1,200, the calculator models customer-month gross profit, caps lifetime at the selected maximum, and compares modeled LTV with acquisition cost.
FAQ
What is LTV:CAC?
LTV:CAC compares modeled customer lifetime value with the cost to acquire that customer. It is a scenario ratio, not a universal verdict on growth quality.
Why cap customer lifetime?
Very low churn can imply extremely long lifetimes. A cap keeps the model operationally realistic and makes the assumption visible.
When does discounting matter?
Discounting reduces the present value of later gross profit. It is useful when payback takes longer or capital cost is material.
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Want help interpreting the model?
Use this calculator as a deterministic planning tool, then talk with Propel Collective about which assumptions are worth validating first.