Unit Economics Calculator
Evaluate the core profitability of your business model: LTV, CAC and other metrics
Results
Customer Acquisition Cost (CAC)
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Customer Lifetime Value (LTV)
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LTV / CAC ratio
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Time to Recover CAC
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Understanding Unit Economics
Unit Economics evaluates the profitability of your business at the level of a single customer. It shows how much revenue each customer contributes after accounting for costs, helping founders understand the true value of acquiring and retaining customers.
This insight allows founders to evaluate growth strategies, pricing, and marketing decisions to ensure long-term sustainability.
How the calculations work
Customer Acquisition Cost (CAC): The average cost to acquire a new customer. This metric shows how much you spend on marketing to bring in each new customer. Calculated as: Monthly Marketing Spend ÷ Customers Acquired Monthly
Customer Lifetime Value (LTV): The total profit a customer is expected to generate over the entire time they stay with your business. This shows the long-term value of acquiring and retaining a customer. Calculated as: ARPU × Gross Margin ÷ Monthly Churn Rate
LTV / CAC Ratio: Compares the total value of a customer to the cost of acquiring them. This ratio shows whether your marketing spend is generating profitable growth. Calculated as: LTV ÷ CAC
Time to Recover CAC: The projected number of months it takes for a new customer to generate enough profit to cover the cost of acquiring them. This helps understand the payback period for marketing investments. Calculated as: CAC ÷ (ARPU × Gross Margin)
