SaaS Unit Economics Calculator: LTV to CAC Ratio and Churn

Calculate your SaaS ARR, ARPU, LTV, CAC, LTV to CAC ratio with a health rating, CAC payback period and Quick ratio from MRR and monthly churn.

SaaS dashboard: ARR, LTV/CAC, payback and Quick ratio

From MRR, customer count, gross margin and churn, the tool computes ARR (MRR × 12), ARPU, LTV, CAC, payback period and the Quick ratio, which compares MRR gained (new customers and expansion) with MRR lost (churn and contraction). With €36,000 of MRR and 240 customers, it gives an LTV/CAC ratio of 5.8, a 6.9-month payback and a Quick ratio of 3.5.

Metrics computed

  • ARR = MRR × 12; ARPU = MRR ÷ active customers.
  • Lifetime = 100 ÷ monthly churn %, in months; LTV = ARPU × lifetime × gross margin.
  • CAC = monthly sales and marketing spend ÷ new customers that month; payback = CAC ÷ (ARPU × gross margin).
  • Churned MRR = MRR × churn; new MRR = new customers × ARPU.
  • Quick ratio = (new MRR + expansion MRR) ÷ (churned MRR + contraction MRR).

Worked example

240 customers, €36,000 MRR, 80% margin, 2.5% monthly churn, €15,000 of spend for 18 new customers, €1,800 of expansion and €400 of contraction. ARR is €432,000 and ARPU €150. A customer stays 40 months: LTV = 150 × 40 × 0.8 = €4,800. CAC is €833, so the ratio is 5.8 and payback 6.9 months (833 ÷ 120). On the growth side, €2,700 of new MRR and €1,800 of expansion against €900 of churn and €400 of contraction give a Quick ratio of 3.5.

Benchmarks shown

The tool flags in green an LTV/CAC of at least 3, a payback of 12 months or less and a Quick ratio of at least 4. These are B2B SaaS investor benchmarks, not standards.

Assumptions and limits

  • ARR is annualised MRR, with no growth projection.
  • New customers are assumed to pay the average ARPU, and revenue churn is assumed equal to customer churn.
  • With zero churn, lifetime, LTV and the LTV/CAC ratio have no limit and show ∞. With no MRR lost at all, the Quick ratio also shows ∞.
  • Amounts in euros, undiscounted.

To start from a known ARPU rather than MRR, enter an MRR equal to ARPU times the number of customers: €5,000 for 100 customers at €50. A panel rates the LTV/CAC ratio as exceptional (4 or more), optimal (3 to 4), average (1.5 to 3) or dangerous (below 1.5). Results support analysis and are not financial advice.

Frequently Asked Questions

How do you calculate the SaaS Quick ratio?

Divide the MRR gained in the month (new customers and expansion) by the MRR lost (churn and contraction). With €2,700 of new MRR, €1,800 of expansion, €900 of churn and €400 of contraction: 4,500 ÷ 1,300 = 3.5. The benchmark often quoted by investors is 4 or more.

How do you get from MRR to ARR?

The tool multiplies MRR by 12: €36,000 of MRR gives €432,000 of ARR. That is recurring revenue annualised at the time of calculation, not a forecast: it includes neither growth nor churn in the following months.

What CAC payback period should you aim for?

The tool treats a payback of 12 months or less as healthy, a common B2B SaaS benchmark. In the example, a €833 CAC and €120 of monthly gross margin per customer give 6.9 months. The threshold is a convention that varies with contract size and available funding.

Why does LTV depend on the number of customers entered?

Because ARPU is derived from MRR divided by active customers. With €36,000 for 240 customers, ARPU is €150 and LTV is 150 × 40 months × 80% = €4,800. With 300 customers for the same MRR, ARPU drops to €120 and LTV to €3,840.

How do you calculate the LTV of a SaaS customer?

Multiply the average monthly revenue per customer (ARPU) by the gross margin, then divide by monthly churn. With €50 ARPU, 85% margin and 3.5% churn: 42.50 ÷ 0.035 = €1,214. Ignoring the margin would give €1,429, an overstated value. In the tool, ARPU is MRR divided by the number of customers: €5,000 of MRR for 100 customers gives that €50.

What is a good LTV to CAC ratio?

The most quoted SaaS benchmark is a ratio of at least 3: a customer should bring in three times what it cost to acquire. The tool rates the ratio exceptional from 4, optimal between 3 and 4, average between 1.5 and 3 and dangerous below 1.5. With the default values, €4,800 of LTV for €833 of CAC gives 5.8: exceptional. These thresholds are market conventions, not an accounting rule.

Should I enter monthly or annual churn?

Monthly. The tool divides 100 by churn to get a lifetime in months: 2.5% a month means an average lifetime of 40 months and roughly 26% of customers lost over a year. Entering that 26% annual figure instead would cut LTV to about a tenth.

Is this tool really free?

Yes, all tools on Kristools are 100% free and accessible without registration.

Is my data protected?

Yes. All processing is performed directly and securely inside your browser. No personal data is sent to our servers.