Chit Interest Rate Calculator

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SaaS Customer Lifetime Value (LTV) Calculator

Monthly recurring revenue per customer.
Percentage of customers cancelling monthly.
Revenue remaining after cost of goods sold.
Total sales & marketing spend / new customers.
Customer Lifetime Value (LTV) $0.00
LTV to CAC Ratio
0.0x
CAC Payback Period 0 months

Understanding SaaS Customer Lifetime Value

For any subscription-based business, Customer Lifetime Value (LTV) is arguably the most critical metric to track. It represents the total amount of revenue a business can expect from a single customer account throughout their relationship with the company. Understanding your LTV allows you to make informed decisions about how much you can afford to spend on acquiring new customers (CAC).

How This Calculator Works

This tool uses the standard formula for calculating LTV in a SaaS environment, accounting for gross margin to give you a "profit-based" LTV rather than just revenue-based. The core inputs are:

  • ARPU (Average Revenue Per User): The average monthly recurring revenue you receive from a single active customer.
  • Churn Rate: The percentage of your subscribers who cancel or stop paying within a given month. Lower churn drastically increases LTV.
  • Gross Margin: The percentage of revenue left after covering the direct costs of servicing the customer (e.g., hosting, support, third-party API costs).
  • CAC (Customer Acquisition Cost): The total cost of sales and marketing divided by the number of new customers acquired in that period.

The Formulas

Our calculator determines your metrics using the following logic:

  • Customer Lifetime (Months) = 1 / Monthly Churn Rate
  • LTV = (ARPU × Gross Margin %) × Customer Lifetime
  • LTV:CAC Ratio = LTV / CAC

Interpreting Your LTV:CAC Ratio

The relationship between what a customer is worth (LTV) and what it costs to get them (CAC) dictates the health of your business.

  • Less than 1:1: You are losing money on every customer. This is unsustainable.
  • 3:1: This is generally considered the industry benchmark for a healthy SaaS business.
  • 5:1 or higher: You may be growing too slowly. You likely have the budget to spend more on marketing to accelerate growth.
function calculateSaaSLTV() { // Get Input Values var arpuInput = document.getElementById("ltvArpu").value; var churnInput = document.getElementById("ltvChurn").value; var marginInput = document.getElementById("ltvMargin").value; var cacInput = document.getElementById("ltvCac").value; // Parse Floats var arpu = parseFloat(arpuInput); var churn = parseFloat(churnInput); var margin = parseFloat(marginInput); var cac = parseFloat(cacInput); // Validation if (isNaN(arpu) || isNaN(churn) || isNaN(margin) || isNaN(cac)) { alert("Please enter valid numbers in all fields."); return; } if (churn 0) { ratio = ltv / cac; } // 5. Calculate Payback Period (Months) // CAC / Monthly Profit var payback = 0; if (monthlyProfit > 0) { payback = cac / monthlyProfit; } // Display Results document.getElementById("ltvResults").style.display = "block"; // Format Currency var formatter = new Intl.NumberFormat('en-US', { style: 'currency', currency: 'USD', minimumFractionDigits: 0, maximumFractionDigits: 0, }); document.getElementById("resultLTV").innerHTML = formatter.format(ltv); document.getElementById("resultRatio").innerHTML = ratio.toFixed(2) + "x"; // Payback Logic if (isFinite(payback)) { document.getElementById("resultPayback").innerHTML = payback.toFixed(1) + " months"; } else { document.getElementById("resultPayback").innerHTML = "Infinite (No Profit)"; } // Badge Logic var badgeElement = document.getElementById("ratioBadge"); badgeElement.className = "ltv-badge"; if (ratio = 1 && ratio = 3) { badgeElement.innerHTML = "Excellent"; badgeElement.classList.add("badge-good"); } }

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