ROAS Calculator
Calculate Return on Ad Spend (ROAS) and determine how much revenue you earn per dollar spent on advertising.
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How to use this calculator
ROAS measures how many dollars of revenue you generate for every dollar spent on ads. A ROAS of 4 means $4 revenue per $1 spent. Break-even ROAS = 1 / (1 − COGS%). Net profit factors in cost of goods and ad spend.
- 1
Enter your total ad spend and the revenue attributable to those ads from your analytics platform.
- 2
Input your cost of goods percentage to see gross and net profit after ad costs.
- 3
Set your target ROAS to instantly see whether your campaign is above or below goal.
Frequently asked questions
How is ROAS calculated?
ROAS is revenue divided by ad spend, shown as a multiple. $4,500 of revenue on $1,000 of spend is 4.50x. If ad spend is zero the calculator reports 0.00x and asks for an ad spend figure instead of comparing against the target.
What are gross profit, net profit and net margin here?
Gross profit is revenue × (1 − cost of goods %). Net profit is gross profit minus ad spend. Net margin is net profit ÷ revenue. For the default inputs the gross profit is $2,700.00, net profit $1,700.00 and margin 37.78%. Only two costs are subtracted: goods and advertising.
How is break-even ROAS found?
It is 1 ÷ (1 − cost of goods %). At 40% cost of goods that is 1.67x, because each dollar of revenue leaves 60 cents to pay for advertising. Below that multiple the ads lose money after product cost, even though the ROAS itself may look healthy.
Can I be below target but still profitable?
Yes. With $2,500 spent, $6,000 of revenue, 55% cost of goods and a target of 3, the ROAS is 2.40x, which misses the target. Net profit is still $200.00 and the break-even ROAS is 2.22x. The target is your own goal, whereas break-even is a mathematical floor.
What happens at 100% cost of goods?
Break-even ROAS is shown as not applicable, because no revenue is left to cover advertising at any multiple. Before this was fixed the field displayed 0.00x, which looked like an easy target. Cost of goods is also limited to between 0% and 100%, and negative spend or revenue is treated as zero.
Which costs should go into the cost of goods percentage?
Any variable cost that rises with each sale: product cost, packaging, shipping you pay, and payment fees if you want them counted. The calculator subtracts one percentage from revenue, so costs you leave out, such as returns or discounts not reflected in revenue, make profit look better than it is.
Does it use attribution or time windows?
No. It uses the revenue number you type, and whatever attribution window and platform produced that number determines how reliable it is. Compare like with like: platform-reported revenue and analytics-reported revenue for the same period often differ, so pick one source and stay with it.
ROAS calculator — return on ad spend with margin, profit and break-even
From a single ratio to profit
Four inputs give seven outputs. Revenue divided by spend gives ROAS. Applying the cost of goods percentage turns revenue into gross profit, and removing ad spend gives net profit and net margin. The break-even ROAS is the multiple at which net profit is exactly zero for your product margin, and the status line compares your actual ROAS with the target you set.
| Output | Formula |
|---|---|
| ROAS | Revenue ÷ ad spend |
| Gross profit | Revenue × (1 − cost of goods %) |
| Net profit | Gross profit − ad spend |
| Net margin | Net profit ÷ revenue |
| Break-even ROAS | 1 ÷ (1 − cost of goods %) |
Worked examples
The figures below are calculator output.
| Spend · revenue · cost of goods · target | ROAS | Net profit | Margin | Break-even | Status |
|---|---|---|---|---|---|
| $1,000 · $4,500 · 40% · 4 | 4.50x | $1,700.00 | 37.78% | 1.67x | At or above target |
| $2,500 · $6,000 · 55% · 3 | 2.40x | $200.00 | 3.33% | 2.22x | Below target |
| $800 · $5,200 · 35% · 6 | 6.50x | $2,580.00 | 49.62% | 1.54x | At or above target |
| $1,000 · $1,000 · 100% · 2 | 1.00x | −$1,000.00 | −100.00% | n/a | Below target |
Why margin changes the answer
The second campaign has a 2.40x ROAS and the third a 6.50x, but the more interesting comparison is distance from break-even. The second sits just above its 2.22x floor, so a small drop in revenue would turn it into a loss. The third has a floor of 1.54x because its products are cheaper to make, leaving a wide cushion. The same ROAS can mean very different things at different margins.
Setting a target
A sensible target is above break-even by enough to pay for overheads and leave a profit, so calculate break-even first and then choose a target. Targets copied from other businesses do not reflect your cost structure. If your target is below break-even, the status line will say “At or above target” while the campaign still loses money, so compare both lines.
Limits of the model
The only deductions are goods and advertising. Fixed costs, staff time, agency fees and refunds are not included, so net profit here is a contribution figure and not a full profit. Revenue is whatever you enter, taken from the platform or your store, so use a consistent source and period when comparing campaigns. If you sell products at several margins, run the calculator once per margin group instead of using a blended cost of goods, because a campaign that mostly sells a low-margin item can look better than it is. The break-even line is the quickest guide to which groups need attention.
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Results are estimates for informational purposes only and do not constitute professional financial, medical, legal, or technical advice. Read full disclaimer →