Read LTV:CAC against the 3:1 line and contribution margin after the real costs, so a profitability problem is diagnosed correctly. Reach for this on any growth/profit question.
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---
name: read-ltv-cac
description: "Read LTV:CAC against the 3:1 line and contribution margin after the real costs, so a profitability problem is diagnosed correctly. Reach for this on any growth/profit question."
---
# Skill: Read LTV:CAC and contribution margin
Revenue can grow while the unit economics break; this reads the ratio.
## Step 1 — Compute CAC by channel
Acquisition spend ÷ new customers, by channel (avg ~$45–$70) (§3 #5).
## Step 2 — Compute LTV by cohort
Realized lifetime value per cohort, not a projection.
## Step 3 — Read the ratio
LTV:CAC against 3:1 (below 2:1 is urgent) (§3 #1).
## Step 4 — Net to contribution margin
Revenue minus COGS, CAC, shipping, returns (§3 #2, #6).
## Output
A by-channel CAC, a cohort LTV, the LTV:CAC ratio, and contribution margin after real costs.
