Act on the result
Use LTV to CAC ratio, allowable CAC and CAC headroom to set the acquisition-cost ceiling.
Educational only: Business decision support, not accounting, tax or legal advice.
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Update policy: Reviewed when formulas or official dependencies change.
Scope: Market-neutral small-business planning using your own assumptions.
What this planner helps you decide
Best for
Teams comparing bounded customer value with acquisition cost.
Outputs
Bounded LTV, LTV:CAC ratio, allowable CAC and headroom.
Start here
Choose your own target ratio and keep all inputs on one period basis.
Use a different tool when: Do not use this to find when retained customer contribution recovers acquisition cost; use CAC Payback Planner for that decision. Use this tool to compare bounded contribution LTV with entered acquisition cost and target ratio.
Cash & growth
LTV to CAC Ratio: bounded ltv
Bounded LTV, LTV:CAC ratio, allowable CAC and headroom.
Amounts use the same currency as your inputs. No currency conversion is performed.
Decision assumptions
Use one consistent period, contribution and currency basis.
Your numbers stay in this browser
Retained revenue for one purchase. Use one consistent currency and indirect-tax basis.
Contribution share before acquisition cost.
Expected purchases per customer in one period.
Retained share carried forward.
Finite whole-number horizon.
Observed or planned CAC. Use one consistent currency and indirect-tax basis.
Your decision target, not a benchmark.
Decision result
Every result is produced by the registered customer and marketing engine.
- Contribution Per Period
- 80.00
- Retention Weight
- 2.31×
- Bounded Ltv
- 185.00
- LTV to CAC ratio
- 3.7×
- Allowable CAC
- 61.67
- CAC Headroom
- 11.67
Scenario comparison
Each row names the assumption axis changed from the baseline.
ScenarioResultDifference
Entered scenario3.7×Baseline
Lower Customer acquisition cost4.11×Not available
Higher Customer acquisition cost3.36×Not available
Save these results, change an input, then compare the updated figures with this baseline.
The baseline is temporary in this tab and is not added to shared scenario links or generated reports.
Calculation details
View calculation detailsView the formulas and inputs used for these results.
Contribution Per Period
Contribution Per Period
revenue × gross margin × purchase frequency80.00Result80.00
Reports money for the declared cohort and period using the entered attribution and contribution basis. The engine retains raw precision; formatting never feeds calculation.
LTV to CAC Ratio Planner formulas →Inputs used by these formula steps
- Contribution Per PeriodRevenue Per Purchase
- 100
- Contribution Per PeriodGross Margin Rate
- 0.4
- Contribution Per PeriodPurchases Per Period
- 2
- Contribution Per PeriodRetention Rate
- 0.75
- Contribution Per PeriodHorizon Periods
- 3
- Contribution Per PeriodCustomer Acquisition Cost
- 50
- Contribution Per PeriodTarget Ltv CAC Ratio
- 3
Retention Weight
Retention Weight
finite retention series2.31 ratioResult2.31×
Reports ratio for the declared cohort and period using the entered attribution and contribution basis. The engine retains raw precision; formatting never feeds calculation.
LTV to CAC Ratio Planner formulas →Inputs used by these formula steps
- Retention WeightRevenue Per Purchase
- 100
- Retention WeightGross Margin Rate
- 0.4
- Retention WeightPurchases Per Period
- 2
- Retention WeightRetention Rate
- 0.75
- Retention WeightHorizon Periods
- 3
- Retention WeightCustomer Acquisition Cost
- 50
- Retention WeightTarget Ltv CAC Ratio
- 3
Bounded Ltv
Bounded Ltv
contribution per period × retention weight185.00Result185.00
Reports money for the declared cohort and period using the entered attribution and contribution basis. The engine retains raw precision; formatting never feeds calculation.
LTV to CAC Ratio Planner formulas →Inputs used by these formula steps
- Bounded LtvRevenue Per Purchase
- 100
- Bounded LtvGross Margin Rate
- 0.4
- Bounded LtvPurchases Per Period
- 2
- Bounded LtvRetention Rate
- 0.75
- Bounded LtvHorizon Periods
- 3
- Bounded LtvCustomer Acquisition Cost
- 50
- Bounded LtvTarget Ltv CAC Ratio
- 3
LTV to CAC ratio
Ltv CAC Ratio
bounded LTV ÷ CAC3.7 ratioResult3.7×
Reports ratio for the declared cohort and period using the entered attribution and contribution basis. The engine retains raw precision; formatting never feeds calculation.
LTV to CAC Ratio Planner formulas →Inputs used by these formula steps
- Ltv CAC RatioRevenue Per Purchase
- 100
- Ltv CAC RatioGross Margin Rate
- 0.4
- Ltv CAC RatioPurchases Per Period
- 2
- Ltv CAC RatioRetention Rate
- 0.75
- Ltv CAC RatioHorizon Periods
- 3
- Ltv CAC RatioCustomer Acquisition Cost
- 50
- Ltv CAC RatioTarget Ltv CAC Ratio
- 3
Allowable CAC
Allowable CAC
bounded LTV ÷ target ratio61.67Result61.67
Reports money for the declared cohort and period using the entered attribution and contribution basis. The engine retains raw precision; formatting never feeds calculation.
LTV to CAC Ratio Planner formulas →Inputs used by these formula steps
- Allowable CACRevenue Per Purchase
- 100
- Allowable CACGross Margin Rate
- 0.4
- Allowable CACPurchases Per Period
- 2
- Allowable CACRetention Rate
- 0.75
- Allowable CACHorizon Periods
- 3
- Allowable CACCustomer Acquisition Cost
- 50
- Allowable CACTarget Ltv CAC Ratio
- 3
CAC Headroom
CAC Headroom
allowable CAC − entered CAC11.67Result11.67
Reports money for the declared cohort and period using the entered attribution and contribution basis. The engine retains raw precision; formatting never feeds calculation.
LTV to CAC Ratio Planner formulas →Inputs used by these formula steps
- CAC HeadroomRevenue Per Purchase
- 100
- CAC HeadroomGross Margin Rate
- 0.4
- CAC HeadroomPurchases Per Period
- 2
- CAC HeadroomRetention Rate
- 0.75
- CAC HeadroomHorizon Periods
- 3
- CAC HeadroomCustomer Acquisition Cost
- 50
- CAC HeadroomTarget Ltv CAC Ratio
- 3
Inputs used
- Revenue Per Purchase
- 100
- Gross Margin Rate
- 0.4
- Purchases Per Period
- 2
- Retention Rate
- 0.75
- Horizon Periods
- 3
- Customer Acquisition Cost
- 50
- Target Ltv CAC Ratio
- 3
Open this calculator with preset values
This calculator supports documented, shareable scenario URLs. Compatible assistants and applications can construct links using the parameters below.
Scenario links contain only allowlisted numeric and closed-choice inputs shown in the URL; Margin101 excludes free text and identifying fields. Anyone you share the URL with can read those numbers, so do not include private or identifying data.
| Parameter | Meaning | Unit | Allowed values | Presence | Default |
|---|---|---|---|---|---|
| customerAcquisitionCost | Observed or planned CAC. Use one consistent currency and indirect-tax basis. | currency units/acquired customer | 0 to 10000000 | Required | 50 |
| grossMarginRate | Contribution share before acquisition cost. | decimal share of purchase revenue | 0 to 1 | Required | 0.4 |
| horizonPeriods | Finite whole-number horizon. | periods | 0 to 120 | Required | 3 |
| purchasesPerPeriod | Expected purchases per customer in one period. | purchases/customer/period | 0 to 1000000 | Required | 2 |
| retentionRate | Retained share carried forward. | decimal share retained/period | 0 to 1 | Required | 0.75 |
| revenuePerPurchase | Retained revenue for one purchase. Use one consistent currency and indirect-tax basis. | currency units/purchase | 0 to 10000000 | Required | 100 |
| targetLtvCacRatio | Your decision target, not a benchmark. | LTV:CAC ratio | 0 to 100 | Required | 3 |
LTV to CAC Ratio: bounded ltv
LTV to CAC ratio compares bounded contribution value with acquisition cost and the target ratio chosen by the user.
Formula summary
- Primary formula
- LTV:CAC = bounded contribution LTV ÷ acquisition cost
Data used here
- The estimate uses your inputs and the general business formula documented in the methodology.
Decision checks
Stress-test the decision
Retest retention rate per period and gross margin rate as percentages on the same customer and purchase basis.
When this estimate can be misleading
- Attribution, incrementality, conversion and retention are user-entered assumptions, not causal claims or forecasts.
- Use one consistent period, currency, contribution and indirect-tax basis.
- This is educational decision support, not financial, tax, legal or accounting advice.
- LTV to CAC ratio compares bounded contribution value with acquisition cost and the target ratio chosen by the user.
Educational estimate, not advice. See all assumptions & limitations →
Related reading
Guides to interpret the decision and its assumptions.
- LTV vs CAC: Assumptions for Small Businesses
Compare bounded contribution LTV with aligned CAC while keeping retention, horizon, cohort and payback limitations visible.
Read guide
Frequently asked questions
How do I compare bounded contribution LTV with entered acquisition cost and target ratio?
Use LTV to CAC ratio, allowable CAC and CAC headroom to set the acquisition-cost ceiling.
Which planning assumptions should I stress-test?
Compare a plausible alternative scenario and verify the decision-critical assumption that changes the plan most.