Unit Economics Calculator
Gross margin, LTV, LTV:CAC, and payback — all in one view
Free unit economics calculator. Enter price, COGS, CAC, and monthly churn to see gross margin, contribution margin, LTV, LTV:CAC ratio, and CAC payback in one dashboard.
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What is an Unit Economics Calculator?
Unit economics is the set of financial metrics that describe how profitable a single unit of business is — where "unit" is one customer, one transaction, or one subscription. Healthy unit economics means every customer you acquire is a profitable long-term investment; poor unit economics means you are subsidising customer acquisition and losing money at scale.
The core unit economics stack is: Gross Margin (revenue minus direct product cost, as %), Contribution Margin (per-customer monthly profit contribution), LTV (total contribution margin over a customer's lifetime), CAC (what you spent to acquire them), LTV:CAC ratio (is LTV worth the acquisition cost?), and CAC Payback Period (how long until you earn back the acquisition cost).
This calculator combines all six metrics into a single view. Enter your price, COGS, CAC, and churn — everything else is derived. It is the first calculation to run on any new business model, new product line, or new market you are considering entering. If LTV:CAC is below 1× or payback exceeds 24 months, the business model needs structural work before scaling.
Why use this Unit Economics Calculator
Built for Indians, by Indians. Every number, every formula, every slab — tuned to FY 2026-27 reality.
Complete unit economics
Six metrics in one view: gross margin, contribution margin, LTV, LTV:CAC, payback, and annual contribution margin.
LTV vs CAC visual
Donut chart shows LTV and CAC side-by-side — the ratio is immediately visible.
Verdict system
Healthy / Marginal / Unprofitable colour-coded verdict based on LTV:CAC.
Scenario modelling
Adjust churn, COGS, or price to see how each lever moves all six metrics simultaneously.
Using the Unit Economics Calculator in 4 steps
No onboarding, no signup. Answer three fields and the numbers update live.
Enter monthly price per customer
Monthly subscription price or average monthly spend per customer (ARPU). Use net price after discounts.
Enter COGS per customer per month
Direct cost of serving one customer per month: hosting, support hours allocated, payment gateway fees, fulfilment, etc.
Enter CAC and monthly churn
Customer Acquisition Cost (blended: total S&M spend ÷ new customers). Monthly churn rate as a percentage.
Interpret the dashboard
Target LTV:CAC ≥ 3× and payback < 12 months. Use the sliders to model what happens if you raise price 10%, cut churn 1%, or reduce CAC by 20%.
Tips to get the most out of it
Unit economics must be segment-level, not business-level. Enterprise customers may have 10× better LTV:CAC than SMB — blending them hides the channel and segment quality differences.
COGS is the most underestimated input. Include a realistic share of support costs per customer (support hours × hourly cost ÷ customer count), infrastructure/hosting allocated per customer, and payment processing fees.
Model three scenarios: current (baseline), improved churn (−2%), and improved acquisition (−20% CAC). This shows which lever has the largest unit economics impact for your specific numbers.
For physical/D2C products, include last-mile delivery cost, return processing, and packaging in COGS. It dramatically changes gross margin compared to digital products.
Investors typically look for: LTV:CAC ≥ 3×, payback < 18 months (< 12 for Series A), gross margin > 60% (SaaS) or > 40% (D2C). Use this calculator to pressure-test your numbers before fundraising.
Real-world scenarios
How Indians actually use this calculator — concrete inputs, concrete outcomes.
HR SaaS startup
Price ₹3,000/mo. COGS ₹600. CAC ₹18,000. Churn 4%. Gross margin 80%. CM ₹2,400. LTV ₹60,000. LTV:CAC 3.33×. Payback 7.5 months. Healthy — proceed to scale.
D2C subscription box
Price ₹1,500/mo. COGS ₹900. CAC ₹3,000. Churn 8%. Gross margin 40%. CM ₹600. LTV ₹7,500. LTV:CAC 2.5×. Payback 5 months. Below 3× — focus on churn reduction or AOV increase.
B2B analytics platform
Price ₹20,000/mo. COGS ₹4,000. CAC ₹80,000. Churn 2%. Gross margin 80%. CM ₹16,000. LTV ₹8L. LTV:CAC 10×. Payback 5 months. Excellent — significant headroom to increase CAC and scale acquisition.
Frequently Asked Questions
Still have a question? Our team replies within a business day.
Gross Margin = (Revenue − COGS) ÷ Revenue. COGS includes direct product costs. Contribution Margin also deducts variable selling costs. In this calculator, CM per customer = Price − COGS per customer. For SaaS, they are often nearly identical.
At 1× LTV:CAC, you break even on acquisition cost over the customer lifetime but have no margin for overhead, tax, or future investment. At 2×, you cover overhead. At 3× (the David Skok benchmark), you have enough profit to fund growth without burning disproportionate capital.
Four levers (in approximate order of difficulty): (1) reduce churn — directly extends LTV; (2) increase price — immediately improves gross margin and CM; (3) reduce COGS — operational efficiency; (4) reduce CAC — better marketing efficiency or stronger organic channels.
Both. Blended CAC (total S&M ÷ all new customers) gives the true economic CAC for the business. Paid CAC (paid S&M ÷ paid-channel new customers) measures paid efficiency. The gap between them is the "organic multiplier" — the value of your brand and SEO.
Pure software has near-zero marginal COGS. But you should still include a share of server costs, support, and payment processing allocated per customer — otherwise gross margin appears 100%, which overstates unit economics. A realistic COGS for most SaaS is 10–20% of revenue.
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