Startup
Unit Economics Calculator
Evaluate LTV:CAC ratio, payback period, and per-customer viability.
Result
LTV vs CAC
Compare lifetime value against acquisition cost.
How to use it
- Enter CAC, monthly ARPU, gross margin percent, average customer lifespan in months, and monthly churn percent. Lifespan and churn should broadly agree because 5% monthly churn implies about 20 months of expected life, while 2% implies about 50 months.
- Read monthly contribution, LTV, LTV:CAC ratio, CAC payback months, unit profit, implied lifespan from churn, and the verdict. Below 1 is unsustainable, 1-3 is marginal, 3-5 is healthy, and above 5 is excellent but can also suggest under-investment in growth.
- Take warnings seriously when implied lifespan from churn differs from your entered lifespan by more than about 20%. That usually means your LTV is being flattered by optimistic assumptions rather than actual retention behavior.
- Use the result to choose the highest-impact fix: lower CAC, higher ARPU, better gross margin, or lower churn. If LTV:CAC is healthy but payback is still long, cash flow rather than profitability is the bottleneck and pricing or onboarding may matter more than top-line growth.
- Re-run every month by channel, plan tier, or segment. Track LTV:CAC and payback together because ratios can improve while capital efficiency still worsens if gross contribution takes too long to recover CAC.
Questions people usually ask
What is a good LTV:CAC ratio?
3:1 or higher is generally considered healthy. Below 1:1 means you spend more to acquire a customer than they're worth. Above 5:1 may indicate you're under-investing in growth.
How is this different from the CLV calculator?
The CLV calculator focuses on computing customer lifetime value in isolation. This tool combines CAC, LTV, payback, and viability scoring into a single decision framework for business model assessment.
Why does churn rate matter if I set lifespan manually?
Churn provides a cross-check: 1 ÷ monthly churn is the lifespan your churn implies. If it differs from the lifespan you entered by more than 20%, the tool warns you; a shorter implied lifespan means your LTV projection may be optimistic, a longer one that it may be conservative.
Is this tool free and private to use?
Yes. All calculations run locally in your browser. No data is sent to any server, no account is required, and no cookies are set.
The same numbers as a table
- Reference SaaS viability grid: LTV:CAC ratio and CAC payback by price and churn
Precomputed by this calculator across common inputs, to cite or download as CSV.
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Background on the Unit Economics Calculator
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- Formula Unit Economics Formula
Understand business profitability with the unit economics calculator. Estimate lifetime value from ARPU, gross margin, and lifespan, then compare it to CAC through the LTV:CAC ratio.
- Formula CAC Payback Formula
Master the CAC Payback Formula to understand how quickly your business recoups customer acquisition costs, important for evaluating marketing efficiency.
- Formula LTV CAC Ratio Formula
Understand the LTV CAC Ratio formula, a unit-economics metric. Learn how to calculate customer lifetime value against acquisition cost to assess business.
- Examples Unit Economics Examples
Explore practical unit economics examples across SaaS, e-commerce, and services. Learn to calculate CLTV, contribution margin, and project profitability.
- Statistics 15 Unit Economics Statistics
Verified unit economics statistics on LTV-to-CAC ratios, payback periods, gross and contribution margin, retention value, and rising acquisition cost, sourced from David Skok, KeyBanc, Benchmarkit, ChartMogul, Bessemer, and Bain.
Articles
- 10 min read Solo Founder Unit Economics at Month Six: Honest Read
Solo-founder unit economics at month six: 120 paying customers, $32 ARPU, 4.8% monthly churn, $48 CAC. One number is quietly killing margin.
- 7 min read How to Calculate Customer Lifetime Value
Calculate CLV without overstating it: discount rate, cohort-based churn, and the gross-margin correction most CLV/CAC ratios get wrong.
- 7 min read How to Calculate Your Break-Even Point
How to calculate your Break-Even Point: break-even analysis done right: contribution margin, fixed-cost discipline, and the checks that keep the number.
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Use it from code
The same calculation as a JavaScript module you can import. It runs where you import it, with no request, key or rate limit.
import { compute } from "https://aibizhub.io/engines/unit-economics-calculator.js";Input and output contract, TypeScript types and the guide for agents.