How to use this calculator
- Enter customer revenue and variable cost.
- Enter CAC, expected customer lifetime, and monthly revenue.
- Review whether customer acquisition is economically scalable.
#674 · Business Tool
Unit Economics Calculator
Analyze customer-level profitability with gross profit, LTV, LTV/CAC ratio, and payback period.
Calculator
Business inputs$
$
$
months
$
Ad space
What the result means
Unit economics shows whether each customer creates enough gross profit to justify acquisition cost.
Gross Profit = Revenue - Variable Cost. LTV = Monthly Revenue × Lifetime × Gross Margin. LTV/CAC = LTV ÷ CAC.
This calculator is for practical business planning. It simplifies accounting treatment and does not replace formal financial statements.
Example calculation
Example: $30 monthly revenue, 24-month lifetime, and 62.5% gross margin gives $450 LTV. With $160 CAC, LTV/CAC is 2.81.
Tips for better results
- Aim for stronger retention before scaling paid acquisition.
- Reduce CAC or increase ARPU to improve LTV/CAC.
- A short payback period protects cash flow.
FAQ
What does this calculator measure?
It estimates a practical business metric from the values you enter and turns the result into a simple status indicator.
Is this a financial statement replacement?
No. This is a planning calculator for quick analysis. Use accounting records and professional advice for formal reporting.
What is considered a good result?
A good result depends on the industry, business model, and stage of the company, so the calculator uses broad operating benchmarks.
How can I improve the result?
Improve pricing, reduce unnecessary cost, collect cash faster, manage inventory tightly, or increase revenue quality depending on the metric.
Why can results differ from my accounting software?
Accounting tools may include accrual rules, timing adjustments, non-cash items, and tax classifications that this simplified calculator does not model.
Related calculators
Business benchmark guide
| Item | Guide |
|---|---|
| LTV/CAC above 3 | Excellent |
| 2 to 3 | Good |
| 1 to 2 | Weak |
| Below 1 | Unsustainable |
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