What is the formula for LTV? and What is the formula for DTI?

Question

Accepted Answer

LTV stands for Lifetime Value and is calculated by subtracting the customer acquisition cost from the total revenue generated by a customer over their lifetime.

LTV = Total Revenue - Customer Acquisition Cost
LTV helps businesses understand the long-term value of their customers.
For example, if a customer generates $1000 in revenue and it costs $200 to acquire them, the LTV would be $800.
DTI stands for Debt-to-Income ratio and is calculated by dividing the total monthly debt payments by the gross monthly income.
DTI is used by lenders to assess a borrower's ability to manage their debt.
For example, if a person has $1000 in monthly debt payments and a gross monthly income of $5000, the DTI would be 20%.

Accepted Answer

LTV = (Average Purchase Value) x (Average Purchase Frequency) x (Average Customer Lifespan)

DTI = (Total Monthly Debt Payments) / (Gross Monthly Income)

Accepted Answer

LTV - Loan amount/Appraisal value or sales prices whichever is less *100 and DTI - Primary Residence Exp + Any Lien Payments + Any Subordinate Liens + PITIA of all other Properties + All other Liabilities/Total Qualifying Income * 100

What is the formula for LTV? and What is the formula for DTI?

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