Customer Acquisition Cost Calculator (CAC & LTV).
Your LTV:CAC ratio and payback period, with a straight verdict on whether your unit economics actually work.
This calculator returns your LTV:CAC ratio and payback period in months from your own acquisition cost and customer lifetime value inputs, with a color-coded verdict on whether the unit economics work.
A ratio below 3:1 is the standard warning threshold used across SaaS and subscription-revenue businesses to flag an unsustainable acquisition cost.
Frequently asked questions
What is a good LTV:CAC ratio?+
A commonly cited healthy range is 3:1 or higher — below 1:1 you're losing money on every customer, 1–3:1 is marginal and worth investigating, and above 3:1 generally signals room to reinvest in growth, though very high ratios (10:1+) can also mean you're under-investing in acquisition.
What counts as customer acquisition cost (CAC)?+
All ad spend AND other acquisition costs (sales staff time, tools, agency fees) divided by the number of new customers acquired in the same period — leaving out non-ad costs is the most common way CAC gets understated.
How is LTV calculated here?+
LTV = average order value × purchase frequency per year × retention years × gross margin — this is a simplified, non-discounted model suitable for planning purposes, not a full discounted-cash-flow customer valuation.
What is CAC payback period and why does it matter separately from the ratio?+
Payback period is how many months it takes to recover your acquisition cost from that customer's margin — a business can have a great LTV:CAC ratio but a payback period so long it creates a cash flow problem funding growth, which the ratio alone doesn't reveal.
Does this replace a proper cohort LTV model?+
No — this uses average inputs for a quick directional read. A real cohort-based LTV model that tracks actual retention curves by acquisition month will always be more accurate for a mature business making major budget decisions.
What is a good LTV:CAC ratio?
A commonly cited healthy range is 3:1 or higher — below 1:1 you're losing money on every customer, 1–3:1 is marginal and worth investigating, and above 3:1 generally signals room to reinvest in growth, though very high ratios (10:1+) can also mean you're under-investing in acquisition.
More questions (4)
What counts as customer acquisition cost (CAC)?
All ad spend AND other acquisition costs (sales staff time, tools, agency fees) divided by the number of new customers acquired in the same period — leaving out non-ad costs is the most common way CAC gets understated.
How is LTV calculated here?
LTV = average order value × purchase frequency per year × retention years × gross margin — this is a simplified, non-discounted model suitable for planning purposes, not a full discounted-cash-flow customer valuation.
What is CAC payback period and why does it matter separately from the ratio?
Payback period is how many months it takes to recover your acquisition cost from that customer's margin — a business can have a great LTV:CAC ratio but a payback period so long it creates a cash flow problem funding growth, which the ratio alone doesn't reveal.
Does this replace a proper cohort LTV model?
No — this uses average inputs for a quick directional read. A real cohort-based LTV model that tracks actual retention curves by acquisition month will always be more accurate for a mature business making major budget decisions.
Why LTV:CAC ratio and payback period tell different stories
This calculator reports both numbers together deliberately: the ratio for the "is this customer worth it" question, and payback period in months for the "can we actually afford to keep acquiring at this rate" question, because a healthy business needs a good answer to both.
Part of the paid media toolkit: one of 14 free tools organised by workflow stage — plan the budget, forecast the CPL, check the creative, verify tracking, audit the report.
- A healthy LTV:CAC ratio (commonly 3:1 or better) tells you a customer is worth acquiring in principle, but it says nothing about how long it takes to actually recover that acquisition cost in cash
- — a business can look great on the ratio and still run into a cash flow wall funding growth if payback stretches to 12+ months.
- The LTV figure here is a simplified model — average order value × purchase frequency × retention years × gross margin — built for a fast directional read, not a full cohort-based customer valuation model that tracks actual retention curves by acquisition month.
- Treat it as a planning number that gets more accurate the more your actual customers resemble the "average" customer you entered.
- For the ad-spend side of this equation specifically, pair this with the ROAS calculator for e-commerce or the break-even CPL calculator for lead-gen.
- Buyers acquired through a live session behave differently on repeat purchase than a standard ad-acquired customer — see live commerce metrics in Malaysia before assuming the same retention assumptions apply.
- Cite this
- shakalakaa (Plixitt Solutions). “CAC & LTV Calculator — Free Unit Economics Tool.”
- https://shakalakaa.my/tools/cac-ltv-calculator · Updated 2026-10-21
- Licensed under CC BY 4.0.
shakalakaa (Plixitt Solutions). "CAC & LTV Calculator — Free Unit Economics Tool." https://shakalakaa.my/tools/cac-ltv-calculator. Updated 2026-10-21. Licensed under CC BY 4.0.