#finance
Thread
Sivert Ridderseth
July 05, 2024 at 01:54 PM
Does this LTV calculation spreadsheet look right? I'm not 100% certain on how to calculate it.
Sumeet Sonkusare
July 06, 2024 at 02:09 AM
Looks incorrect to me.
They've already calculated the LTV (long term value) in Row 7 which is 1756.
You don't need to multiply it with Buying frequency per year, as that is double counting (Buying frequency is inbuilt into customer revenue per year)
LTV is simply how much revenue you are expecting from your avg customer over their lifetime (which is basically how long does a customer stay with your business on an avg)
Hope this helps.