Cost per acquisition tells you how much advertising it takes to produce one conversion. If you spent $2,000 and got 40 sales, your CPA is $50. Variants measure different conversions: cost per lead (CPL) divides by leads, and customer acquisition cost (CAC) usually includes all sales and marketing costs, not just ads.
A useful refinement is cost per new customer: spend divided by first-time buyers only. Repeat purchases make CPA look better than the real cost of acquiring someone new, especially for brands with loyal customers who come back through retargeting.