Life Time Value (LTV) - Customer Acquisition Cost (CAC) Ratio Template Strictly Confidential

Notes
This Excel model is for educational purposes only and should not be used for any other reason.
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© Corporate Finance Institute. All rights reserved. Startup year

Startup eCommerce 2016 2017

Revenue $ 5,478,000 $ 7,704,000

Discounts, Promotions, Markdowns $ (1,643,400.00) $ (2,157,120.00)
Net Revenue $ 3,834,600 $ 5,546,880
COGS $ (2,739,000.00) $ (3,852,000.00)
Gross Profit $ 1,095,600.00 $ 1,694,880.00
Gross Margin 28.6% 30.6%
Total Variable Cost $ 2,618,640.00 $ 1,765,200.00
Contribution Margin $ (1,523,040.00) $ (70,320.00)
EBITDA Margin -64.5% -22.0%

Customers 14,940 27,765

Revenue per Customer $ 256.67 $ 199.78

Marketing Spend $ 2,280,000.00 $ 1,380,000.00

# of Customers Acquired (Paid) 17,520 10,080
# of Customers Acquired (Organic) 2,400 15,600
Total Customers Acquired 19,920 25,680
Churn Ratio 25% 25%

Customer Acquisition Cost 130 137

Life Time Value 152 204
LTV/CAC 1.2x 1.5x

Customer Acquisition Cost 130 137

Contribution Margin per Order 38 51
Payback (# of orders) 3.4 2.7

Burn Rate (3,045,354) (1,609,854)

Cash Balance 8,000,000 4,954,646 3,344,792
Revenu e ($ m illio ns)

M arginM argin

$45,000,000 Revenue 100%

EBITDA Margin
$35,000,000 Gross Margin 75%

$25,000,000 50%

$15,000,000 25%

$5,000,000 0%

-$5,000,000 -25%

-$15,000,000 -50%
 EBITDA Margin

M argi
Reve
$35,000,000 Gross Margin 75%

$25,000,000 50%

$15,000,000 25%

$5,000,000 0%

-$5,000,000 -25%

-$15,000,000 -50%
2016 2017 2018 2019 2020 2021 2022

Payback (# orders)
$200 Customer Acquisition Cost 5.0
$180 Contribution Margin per Order 4.5
Payback (# of orders)
$160 4.0
$140 3.5
$120 3.0
$100 2.5
$80 2.0
$60 1.5
$40 1.0
$20 0.5
$0 0.0
2016 2017 2018 2019 2020 2021 2022

This file is for educational purposes only. E&OE

Corporate Finance Institute®

https://corporatefinanceinstitute.com/
 Terminal year

2018 2019 2020 2021 2022

$ 11,778,000 $ 17,724,000 $ 23,940,000 $ 32,736,000 $ 38,862,000

$ (2,944,500.00) $ (3,899,280.00) $ (4,788,000.00) $ (5,892,480.00) $ (6,995,160.00)
$ 8,833,500 $ 13,824,720 $ 19,152,000 $ 26,843,520 $ 31,866,840
$ (5,889,000.00) $ (8,862,000.00) $ (11,970,000.00) $ (16,368,000.00) $ (19,431,000.00)
$ 2,944,500.00 $ 4,962,720.00 $ 7,182,000.00 $ 10,475,520.00 $ 12,435,840.00
33.3% 35.9% 37.5% 39.0% 39.0%
$ 1,197,360.00 $ 1,428,960.00 $ 1,549,920.00 $ 1,813,920.00 $ 1,877,280.00
$ 1,747,140.00 $ 3,533,760.00 $ 5,632,080.00 $ 8,661,600.00 $ 10,558,560.00
2.2% 10.7% 16.1% 20.0% 19.6%

42,604 59,133 76,030 91,402 104,732

$ 207.34 $ 233.79 $ 251.90 $ 293.69 $ 304.27

$ 690,000.00 $ 720,000.00 $ 720,000.00 $ 750,000.00 $ 780,000.00

5,040 5,040 5,040 5,040 5,040
31,200 45,600 58,800 76,800 86,400
36,240 50,640 63,840 81,840 91,440
25% 25% 25% 25% 25%

137 143 143 149 155

269 336 398 460 496
2.0x 2.4x 2.8x 3.1x 3.2x

137 143 143 149 155

67 84 100 115 124
2.0 1.7 1.4 1.3 1.2

(351,799) (106,876) 1,562,621 2,219,576 3,656,808

2,992,993 2,886,117 4,448,738 6,668,315 10,325,123
Burn ($ millions)

$13,000,000 Burn Rate Cash Balance

$11,000,000
$9,000,000
$7,000,000
$5,000,000
$3,000,000
$1,000,000
-$1,000,000
-$3,000,000
-$5,000,000
$9,000,000

Bu
$7,000,000
$5,000,000
$3,000,000
$1,000,000
-$1,000,000
-$3,000,000
-$5,000,000
2016 2017 2018 2019 2020 2021 2022

LTV/CAC Ratio
$600 Customer Acquisition Cost 5.0x
Life Time Value 4.5x
$500 LTV/CAC 4.0x
$400 3.5x
3.0x
$300 2.5x
2.0x
$200 1.5x
$100 1.0x
0.5x
$0 0.0x
2016 2017 2018 2019 2020 2021 2022
 LTV/CAC Ratio

5.0x
4.5x
4.0x
3.5x
3.0x
2.5x
2.0x
1.5x
1.0x
0.5x
0.0x