ROAS Calculator

How ROAS and break-even ROAS are calculated

ROAS is a simple ratio. The useful part is pairing it with margin, so you know the floor before you scale.

Paid efficiency only pays off if the store converts and customers come back. Pair this with the ecommerce revenue calculator, the customer lifetime value calculator and our PPC services.

ROAS calculator FAQs

What is ROAS?

ROAS (return on ad spend) is the revenue your ads bring in for every dollar spent on them. The formula is ROAS = revenue from ads ÷ ad spend. A 4x ROAS means $4 in revenue for every $1 of ad spend. It measures revenue, not profit, until you compare it with your margin.

How do you calculate ROAS?

Divide the revenue attributed to your ads by what you spent on them over the same period. $40,000 in revenue on $10,000 of spend is a 4x ROAS, which some platforms show as 400%. Keep the attribution window and channels the same when you compare periods.

What is break-even ROAS?

Break-even ROAS is the ROAS at which ad spend uses up exactly the margin on the sales it drives. The formula is 1 ÷ margin, with margin as a decimal, so a 40% margin breaks even at 2.5x. Below that line every ad dollar loses money before fixed costs. Above it, ads add profit.

How do you calculate break-even ROAS from product costs?

Take one typical order. Subtract the product cost, the shipping you pay and payment fees from the order value, then divide the order value by what is left. A $50 order with $20 of product cost, $5 of shipping and 3% fees ($1.50) leaves $23.50, so break-even ROAS is 50 ÷ 23.50 = 2.13x. Switch the calculator to order costs and it does this for you.

What is a good ROAS?

Any ROAS above your break-even line makes money on a contribution basis, so a good ROAS depends on your margin. A brand with a 50% margin breaks even at 2x, while one with a 25% margin needs 4x before ads pay for themselves. Campaigns that win new customers can run closer to break-even when repeat orders pay back later, which the customer lifetime value calculator helps you check.

What is target ROAS?

Target ROAS is the return you ask Google Ads or Meta to aim for when they set bids. Set it at or above your break-even ROAS, plus the profit you want left after ads. At a 40% margin, break-even is 2.5x, and a 3x target leaves about 7 cents of every revenue dollar after ad spend. Google Ads takes the target as a percentage, so 3x is entered as 300%.

Is ROAS the same as ROI or POAS?

No. ROAS divides revenue by ad spend. POAS (profit on ad spend) divides gross profit by ad spend, so 1x is break-even. Marketing ROI takes the ad spend back out as well: (gross profit minus ad spend) ÷ ad spend. A campaign can show a strong ROAS and still lose money on thin margins, which is why this calculator shows break-even ROAS, POAS and contribution next to ROAS.

Is this ROAS calculator free?

Yes. It runs in your browser, needs no sign-up and does not store what you enter. Use it to check paid campaigns before you change budgets.