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. The verdict reads an LTV:CAC ratio below 1 as unsustainable, 1-3 as marginal, 3-5 as healthy, and 5 or more as excellent; a very high ratio can also mean you are under-investing 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?
David Skok's guideline for SaaS is above 3:1, with the best businesses reaching 7:1 or 8:1. Below 1:1 you spend more to acquire a customer than they are worth.
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
- Alternatives Stripe Alternatives for SaaS (2026)
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Articles
- 7 min read How to Run a Profitability Analysis
Run a profitability analysis by product, channel, and segment to find where contribution margin comes from, where it leaks, and how to fix it.
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Free, no-signup calculators from this hub for SaaS unit economics, pricing and valuation, and how they differ from ProfitWell, ChartMogul and Baremetrics.
- 16 min read The AI Micro-SaaS Unit Economics Report 2026
AI micro-SaaS unit economics 2026: engine-computed margins by model tier (77% premium, 91% mid, 98% budget), full-stack cost, break-even price.
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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.