LTV to CAC Ratio Calculator
Reviewed by Hamza Gujjar, Algorithm Architect & Software Developer
Last updated: July 27, 2026The single number investors ask about first
LTV:CAC ratio compares how much a customer is worth over their lifetime against how much it costs to acquire them - it is one of the first metrics investors and operators check to judge whether a growth model is sustainable.
Worked example
For a customer lifetime value of $1,500 and acquisition cost of $400:
Ratio = 1500 / 400 = 3.75:1 (Healthy range)
| LTV:CAC Ratio | General Interpretation |
|---|---|
| Below 1:1 | Losing money on every customer acquired |
| 1:1 - 3:1 | Below the commonly cited healthy benchmark |
| 3:1 - 5:1 | Healthy, sustainable range |
| Above 5:1 | Possibly under-investing in growth |
A ratio far above 5:1 isn't necessarily a red flag on its own, but it can suggest a company has room to invest more aggressively in acquisition while still staying comfortably profitable per customer.