# LTV CAC Calculator MCP MCP

> The LTV CAC Calculator determines if your customer acquisition strategy actually makes money by calculating three key financial metrics: Customer Lifetime Value (LTV), Customer Acquisition Cost (CAC) per channel, and the overall profitability ratio. It tells you exactly whether your marketing spend supports sustainable growth or if you're just burning cash.

## Overview
- **Category:** finance
- **Price:** Free
- **Tags:** LTV, CAC, profitability, unit economics, growth metrics

## Description

Every growing company hits this wall: they know they need customers, but they aren't sure if acquiring one costs more than it will ever be worth. This MCP solves that gap by taking complex spending data and turning it into a single measure of financial health. You feed in your average customer value and churn rate to project the total lifetime revenue; you input marketing spend across various channels to pinpoint the cost per new user; and finally, the system combines those two figures to deliver an LTV CAC ratio and a clear verdict on profitability.

If you're running complex financial models based on spending data, knowing your variables are protected is key. That’s where Vinkius comes in. Your credentials pass through a zero-trust proxy, meaning the system uses your keys for calculations but never stores them anywhere. This lets your agent handle highly sensitive unit economics without putting your company's core financial data at risk.

## Tools

### calculate_cac
Figures out your Customer Acquisition Cost by taking spending and customer counts for specific marketing channels.

### calculate_ltv
Projects a user's total lifetime value using their average revenue, gross margin percentage, and churn rate.

### evaluate_profitability
Delivers your final financial verdict by comparing the calculated LTV to the total CAC spent over a given time period.

## Prompt Examples

**Prompt:** 
```
My ARPU is $1200, gross margin is 0.65 (65%), and my annual churn rate is 0.08 (8%). Please calculate the LTV.
```

**Response:** 
```
I will first run `calculate_ltv` with ARPU=1200, grossMarginPercentage=0.65, and churnRateAnnualPct=0.08. The projected LTV is $10,533.33.
```

**Prompt:** 
```
Calculate CAC for these two channels: Paid Search ($20k spend, 40 customers) and Organic Content ($5k spend, 100 customers).
```

**Response:** 
```
Using `calculate_cac`, the resulting CAC is $0.50 for Paid Search ($20k/40) and $0.05 for Organic Content ($5k/100). Total CAC is $10,500.
```

**Prompt:** 
```
Given an LTV of $10,533.33 and a total CAC of $10,500, with a gross margin of 0.65 over 12 months, what is the profitability verdict?
```

**Response:** 
```
I will run `evaluate_profitability` using LTV=$10533.33, totalCacAmount=$10500, grossMarginPercentage=0.65, and timePeriodMonths=12. The result shows an Optimal verdict (ratio > 5:1).
```

## Capabilities

### Determine Customer Lifetime Value (LTV)
Calculates the long-term, projected revenue from a single customer based on average spend and churn rate.

### Calculate Cost Per Channel (CAC)
Pinpoints the precise cost required to acquire one paying user across specific marketing channels.

### Assess Overall Profitability
Combines LTV and CAC to calculate the ratio, payback period in months, and a clear verdict on financial viability.

## Use Cases

### Reviewing Q4 Marketing Spend
The marketing team spent $50k across Facebook and Google. By running `calculate_cac`, they found the cost per user was much higher on Facebook than expected, leading them to reallocate budget.

### Assessing New Product Line Viability
The PM used `calculate_ltv` with conservative ARPU estimates to ensure that even if the product adoption was slower than hoped, it would still cover its long-term costs.

### Pitching Budget Increases
Instead of just asking for more money, the analyst combined `calculate_cac` and `calculate_ltv`, showing that increasing spend only in high-return channels would improve the overall ratio to 'Optimal'.

### Identifying Profit Bottlenecks
The finance director ran `evaluate_profitability` after adjusting gross margins, instantly seeing that a minor change in pricing structure moved their status from 'Warning' to 'Critical', signaling an immediate need for action.

## Benefits

- The `calculate_cac` tool breaks down total spending, telling you exactly how much it costs to get a customer from Paid Search versus Organic Content.
- `calculate_ltv` gives you the big picture by forecasting total customer value using ARPU and churn rates, moving beyond simple annual revenue projections.
- The `evaluate_profitability` tool synthesizes everything into one number—the LTV CAC ratio—so you don't have to cross-reference three different spreadsheets.
- You immediately see the financial risk. The output includes a clear verdict (Optimal, Warning, or Critical), telling you where your spending stands right now.
- It helps you plan for cash flow by calculating the payback period in months, giving you a concrete timeline for return on investment.

## How It Works

The bottom line is that it gives you an immediate, quantifiable measure of whether spending on growth is actually profitable.

1. First, you give your agent data covering total spend and new customers for every marketing channel using `calculate_cac`.
2. Next, you provide the Average Revenue Per User (ARPU), gross margin percentage, and churn rate to determine the projected customer value via `calculate_ltv`.
3. Finally, you run `evaluate_profitability`, feeding in your total CAC amount, LTV figure, and time period to get a final verdict.

## Frequently Asked Questions

**How do I use calculate_cac for multiple channels? (calculate_cac)**
You provide the tool with a JSON array containing objects, where each object specifies the channel name, total spend, and new customers acquired. This allows you to get CAC per source in one go.

**What do I need for calculate_ltv? (calculate_ltv)**
You must provide three numbers: your Average Revenue Per User (ARPU), the gross margin percentage, and the annual churn rate. These inputs dictate the projected customer value.

**Does evaluate_profitability handle multiple time periods? (evaluate_profitability)**
Yes, you specify the 'timePeriodMonths' when calling the tool. This lets you assess profitability over different windows—say, 6 months versus a full year.

**Is there a risk of my financial data being exposed? (General)**
No. All calculations run inside Vinkius's secure sandbox, and your credentials pass through a zero-trust proxy. Your keys are used only in transit for the calculation, never stored on disk.

**When calling `calculate_cac`, what specific data must I provide for each channel?**
You must pass a JSON array containing objects, where each object specifies three key pieces of information: the channel name, total spend, and the number of new customers acquired. This structure lets your agent calculate CAC per source.

**Can I still run `calculate_ltv` if my gross margin percentage is very low?**
Yes, you can input a low or even fractional gross margin percentage into `calculate_ltv`. The tool uses this value to adjust the projected LTV calculation accurately.

**Does calling `evaluate_profitability` require me to run `calculate_ltv` first?**
Not necessarily, but for the best results, you should provide already calculated and finalized LTV and CAC figures. The tool will evaluate any set of metrics you give it.

**Are there rate limits if I use multiple functions like `calculate_cac` or `evaluate_profitability`?**
Vinkius manages the infrastructure, so general usage is smooth. For high-volume, repetitive calls, check the latest platform documentation for specific enterprise rate guidelines.

**What is the most critical ratio to monitor?**
The LTV:CAC ratio is paramount. You can use `evaluate_profitability` by feeding it the results from `calculate_ltv` and `calculate_cac`. A healthy ratio (5:1 or higher) confirms that your acquisition spending generates sufficient long-term revenue.

**How do I calculate LTV?**
Use the `calculate_ltv` tool. You must provide three inputs: ARPU, gross margin percentage (as a decimal), and the annual churn rate (also as a decimal). The resulting projected LTV is critical for subsequent steps.

**Does this tool track CAC by channel?**
Yes. The `calculate_cac` tool accepts a JSON array of channel data, allowing you to calculate the specific Cost per Customer (CAC) for every source--be it paid search or social media.