ROAS Calculator
Is the ad spend actually making money?
ROAS Calculator
ROAS = Revenue / Ad spend; Break-even ROAS = 1 / gross margin
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What This Calculator Does
The ROAS Calculator measures revenue returned per unit of advertising spend, then goes one step further and shows whether that revenue actually covers the cost of the goods sold. It also reports the break-even ROAS implied by your gross margin, which is the number a campaign must beat to be profitable.
How It Works
ROAS is attributed revenue divided by ad spend. It says nothing about margin, so a high ROAS can still lose money. Profit after ad spend applies gross margin to revenue and subtracts the spend. Break-even ROAS is one divided by gross margin, expressed as a multiple: with a 40% margin, you need 2.5 in revenue for every 1 spent before ads break even.
Example
Spend 3,000 to generate 12,000 of revenue and ROAS is 4.0×, or 400%. At a 40% gross margin, gross profit is 4,800, so profit after ad spend is 1,800. Break-even ROAS is 100 / 40 = 2.5×, so the campaign clears its hurdle comfortably.
Formula
ROAS = Attributed revenue / Ad spendProfit = Revenue × gross margin − Ad spendBreak-even ROAS = 1 / gross marginA 25% margin needs 4.0×; a 50% margin needs 2.0×.
Reading the Results
ROAS
Revenue per unit of ad spend. 4.0× means every 1 spent returns 4 in revenue — not 4 in profit.
Break-even ROAS
The minimum ROAS that covers cost of goods. Below this figure, extra revenue still loses money after the product is delivered.
Profit after ad spend
Gross profit minus ad spend. It still excludes overheads such as salaries, software, and fulfilment, so it is a campaign-level contribution figure.
Sources and References
Google Ads Help — Return on ad spend (ROAS)
Conversion value divided by cost
Defines ROAS as conversion value over cost, and notes it ignores margin and overhead.
Meta Business Help Centre — ROAS
Purchase value divided by spend
Platform-reported ROAS depends on the attribution window and modelled conversions.
References identify the method or data behind this calculator. Where a standard or tariff changes, the current edition applies, and the assumptions stated above take precedence over a remembered figure.
Frequently Asked Questions
What is a good ROAS?
It depends entirely on margin. A 4× ROAS is strong at a 60% margin and loss-making at 20%. Calculate your break-even ROAS first, then judge performance against that floor rather than a generic benchmark.
What is the difference between ROAS and ROI?
ROAS compares revenue with ad spend. ROI compares profit with total investment, including production, salaries, and tools. ROAS is a campaign efficiency metric; ROI is a business profitability metric.
Does ROAS include organic sales?
Only if they are attributed to the campaign, which is why attribution windows matter. Platform-reported ROAS often includes conversions that would have happened anyway, so it tends to overstate incremental impact.
How do I calculate break-even ROAS?
Divide 1 by your gross margin as a decimal. A 40% margin gives 1 / 0.4 = 2.5×. Below 2.5×, the campaign is paying more for ads than it earns in gross profit.