What is a healthy LTV/CAC ratio?

A ratio of 3:1 or higher is generally considered healthy for SaaS. Below 1:1 means you're spending more to acquire customers than they're worth.

How do I improve my LTV/CAC ratio?

Increase LTV by reducing churn and growing expansion revenue. Reduce CAC by improving conversion rates, optimizing ad spend, or investing in organic channels.

LTV/CAC Ratio Calculator — Customer Lifetime Value to Acquisition Cost

Calculate the ratio of customer lifetime value to customer acquisition cost. A key SaaS health metric indicating unit economics efficiency.

Principal ($)

Annual Rate (%)

Years

Compounding / Year

$ Finance Disclaimer: These calculators are for educational and illustrative purposes only. Results do not constitute financial advice. Consult a licensed financial advisor before making investment or borrowing decisions.

How to Use

Enter the values for the scenario you are assessing. Calculate the ratio of customer lifetime value to customer acquisition cost. A key SaaS health metric indicating unit economics efficiency. Use the ltv/cac ratio result to inform your calculation.

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