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How to calculate LTV to CAC ratio

The LTV to CAC ratio formula, with plain worked examples you can check yourself.

LTV to CAC ratio = LTV ÷ CAC

The result is a number in ×.

Worked examples

LTV = 250 · CAC = 50LTV to CAC ratio = 5×
LTV = 800 · CAC = 200LTV to CAC ratio = 4×
LTV = 400 · CAC = 200LTV to CAC ratio = 2×

How to use it

  1. Write down the values for each letter in the formula.
  2. Do the brackets first, then divide or multiply.
  3. Check the units before you compare results.
  4. Compare the answer with last period or with a competitor to see if it is good or bad.

This formula belongs to Funding & Growth.

Related terms

Venture capitalBurn rateIPOPivotSeed fundingRunway

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