Evaluating Financial Health and the LTV to CAC Ratio

This chapter discusses important metrics for CFOs to consider when evaluating a company's financial health, such as revenue per employee, average revenue per customer, lifetime value, and customer acquisition cost. They highlight the significance of maintaining a lifetime value to customer acquisition cost ratio of more than three and caution against the LTV to CAC death trap. The chapter also addresses the challenges businesses, especially DTC e-commerce, may face with fluctuating customer acquisition costs due to rising interest rates or increased customer acquisition expenses.