Can I use annual churn?
Convert annual churn to monthly before entering. For example, 20% annual churn ≈ 1.84% monthly.
Step-by-step walkthrough
Unit Economics (CAC:LTV) Guide
Use this companion guide beside the interactive calculator to make sure you understand the “why” behind every click. Each section includes the classroom explanation, student-friendly language, and quick practice prompts.
Before you start
Collect the data points listed below and double-check their units. Keeping an organized “givens” list is one of the fastest ways to reduce math errors and impress exam graders.
- ltv
- cac
- payback
Detailed procedure
Step 1
Enter CAC and average monthly revenue per user (ARPU).
Step 2
Add gross margin percent and monthly churn percent.
Step 3
Review contribution, LTV, LTV:CAC, and CAC payback.
Teaching & troubleshooting tips
What if gross margin is 0?
Contribution becomes zero, so LTV and payback cannot be computed. Increase margin or recheck your inputs.