Definition
Lifetime gross profit is the total gross profit expected from a customer over their lifetime (the value component in LTV).
Measured as
Measure Lifetime Gross Profit with the same date, unit basis, and accounting or policy definitions used in the rest of your model.
Operator takeaway
- Tie Lifetime Gross Profit to the same balance-sheet date, scenario, and decision memo you are using elsewhere in the model.
- Document which claims, costs, or adjustments your team includes before comparing numbers across forecasts, covenants, or valuation work.
Next decision
- Decide whether Lifetime Gross Profit belongs in cash planning, valuation, or debt monitoring so the number is used in the right model.
- If the number changes, trace the timing, policy, or balance-sheet assumption behind it before you react.