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  5. CAC & LTV Calculator: Customer Acquisition Cost and Lifetime Value

Frequently Asked Questions

  • CAC, or customer acquisition cost, is acquisition spend divided by new customers. In this calculator it combines ad spend and sales spend, then divides by the number of new customers acquired.
  • Use LTV profit for the main ratio because acquisition spend must be paid back from contribution margin, not from gross revenue. Revenue LTV is still shown so you can see the top-line customer value.
  • Start with SBA guidance on market research and startup costs, then confirm deductible expense treatment with the IRS business expense resource guide.

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CAC & LTV Calculator

Customer Acquisition Cost and Lifetime Value

Inputs

Acquisition Setup

$
$

Customer Value

$
/yr
yrs
%

Results

LTV/CAC Ratio

14.0 : 1

Excellent / underinvesting? · CAC: $60.00 · Gross Profit LTV: $840.00

CAC vs Gross-Profit LTV

$60
$840
CAC
Gross Profit LTV

Unit Economics Summary

CAC
$60.00
Revenue LTV
$1,200.00
Gross Profit LTV
$840.00
Net Value per Customer
+$780.00
Cohort ROI
1,300.0%
Payback Orders
1.7
Growth Status
Excellent / underinvesting?

Acquisition Spend

$6,000

Cohort Gross Profit

$84,000

Cohort Net Profit

$78,000

Growth Metrics Desk

A healthy LTV/CAC ratio starts with clean acquisition costs and margin-based customer value

CAC/LTV is a unit-economics check, not just a marketing KPI. The SBA market research guide highlights the need to understand customer demand before spending heavily, while the SBA startup cost guide keeps acquisition spend inside the full cost picture.

"A strong ratio is useful only when CAC is complete, gross margin is realistic, and the payback window matches your cash runway."

Use fully loaded CAC

Include ad spend, sales tools, commissions, agency retainers, and campaign production when those costs directly support new customers.

Prefer gross-profit LTV

Revenue LTV can look impressive while margin is thin. Gross-profit LTV is closer to the cash available to repay CAC.

Check payback speed

If payback requires many orders, compare your assumptions with official expense guidance such as the IRS business expense resources.