Method and assumptions
This simplified model uses average revenue per account, gross margin and monthly logo churn. Cohort analysis is preferable when you have enough history.
LTV = ARPA × gross margin ÷ monthly churn. CAC = sales and marketing spend ÷ new customers.
Common questions
What is a healthy LTV:CAC ratio?
There is no universal target. Compare it with payback, growth stage and cash constraints.
Should CAC include salaries?
Include the sales and marketing costs attributable to acquiring the selected customer cohort.
Independent planning calculator. Not financial, tax, legal or investment advice.