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Calculate B2B SaaS LTV and CAC

MediumMetrics00:00
AvidXchange
Your interviewer · Financial Analyst
In session
Interviewer

Welcome to your interview for the Financial Analyst role at AvidXchange.

The question is on your right: Calculate B2B SaaS LTV and CAC. Take a moment with it first.

Talk your thinking through with me if you like - when you're confident, submit your answer and I'll grade it like a real screen. You have three graded attempts to score 7/10 or better.

Only Submit answer is graded - discussion is free practice.

Problem

Scenario

You're evaluating the economics of a B2B SaaS business and want a clean way to compare customer value with acquisition cost. The team uses these metrics for budgeting, growth planning, and understanding whether different customer segments are actually profitable over time.

Question

Walk me through how you calculate LTV and CAC in a B2B SaaS business. What nuances matter?

What this tests

  • Defining LTV and CAC precisely in a B2B SaaS context
  • Handling retention and churn correctly in lifetime assumptions
  • Matching acquisition cost to the right customer cohort and segment
  • Knowing when simple formulas break down