SaaS growth efficiency metric.

LTV:CAC compares the lifetime value of a customer against what it cost to acquire them. LTV = monthly gross margin ÷ monthly churn. CAC = sales and marketing spend ÷ new customers. Divide LTV by CAC to get the ratio. Below 1:1 every new customer loses money. 1:1 to 3:1 is growth-investing territory. 3:1 is healthy. 5:1+ means you're under-spending on growth.

100 average MRR at 80% gross margin = 80 margin. Churn 3%/month = 33 month lifetime. LTV = 80 × 33 = 2,640. CAC 500 gives 5.3:1 ratio. Healthy but on the edge of over-thrift. CAC payback = 500 ÷ 80 = 6.25 months, within the standard 12-month venture-acceptable target.

The ratio changes meaning with company stage. Early-stage SaaS (under 1M ARR) often runs 1:1 to 2:1 while scaling go-to-market. Mature SaaS should sit at 3:1 to 5:1 with CAC payback under 12 months. Anything significantly above 5:1 usually signals the company is leaving growth on the table - every pound of additional CAC would return 5+ in LTV.

Run it with sensible defaults

Using avg mrr per customer of 100, gross margin of 80%, monthly churn of 3%, cac of 500, the calculation works out to 5.33x. Nudge the inputs toward your own situation and the output recalculates instantly. The defaults are meant as a starting point, not a recommendation.

The levers in this calculation

The inputs — Avg MRR per Customer, Gross Margin %, Monthly Churn %, and CAC — do not pull with equal force. Not every input has equal weight. Flip one at a time toward extreme values to feel which ones move the needle most for your situation.

How the math works

LTV = (MRR × gross margin) ÷ monthly churn. Ratio = LTV ÷ CAC. Payback = CAC ÷ (MRR × gross margin). The working is transparent — you can verify every step yourself in the formula section below. No black box, no opaque "proprietary model".

What the score tells you

Headline financial numbers — income, savings, debt — each tell part of the story. This calculation stitches several together into a single read you can track over time. The value is in the direction, not the absolute number.

What this doesn't capture

The score is a composite of the inputs you provide. Life context — job security, family obligations, health, housing — doesn't appear in the math but shapes the real picture. Use the number as a prompt, not a verdict.