PALLAS / CALCULATOR

LTV-Based CAC Ceiling Calculator

Calculate the maximum CAC consistent with customer lifetime value, gross margin and a target LTV-to-CAC ratio.

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Updates as valid inputs change.
Method & formula

Lifetime value is first reduced to contribution value using gross margin, then divided by the target LTV-to-CAC ratio.

  • Contribution LTV = customer lifetime value x gross margin
  • Maximum CAC = contribution LTV / target LTV:CAC ratio
Example

600 lifetime value at 70% gross margin gives 420 contribution LTV. At a 3:1 target ratio, the CAC ceiling is 140.

FAQ

Is this a forecast?

No. It is deterministic planning arithmetic based on the assumptions you enter. Actual commercial performance can differ.

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LTV:CAC Ratio CalculatorCompare customer lifetime value with customer acquisition cost, calculate the LTV:CAC ratio and test an optional target ratio without hidden assumptions.Customer Lifetime Value CalculatorEstimate gross-margin customer lifetime value from average order value, annual purchase frequency, gross margin percentage and customer lifespan.CAC Payback Period CalculatorEstimate CAC payback from acquisition cost and monthly customer contribution after gross margin and service cost.

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