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ROAS Calculator
Find out whether your ads actually make money. Enter the revenue, the spend, and your gross margin to see your return on ad spend, your ACOS, the break-even ROAS your margin demands, and the real profit left after advertising.
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→ Ad efficiency
Above break-even — the ads make money
A 4.00× ROAS returns $4.00 for every $1 spent, but the number that matters is break-even ROAS (2.50×), set by your 40% margin. A 4× ROAS looks great at a 40% margin and loses money at a 20% one — always judge ROAS against margin, not a universal target.
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Calculations run entirely in your browser. Figures are estimates for planning, not financial advice.
ROAS is only half the story
Return on ad spend measures the revenue your advertising brings back per dollar spent, and it's the headline metric on every ad dashboard. But ROAS is a gross number — it ignores what the product itself costs to make. A 4× ROAS sounds like a win until you remember that on a low-margin product, most of that revenue goes straight to cost of goods. The number that actually decides whether ads are profitable is break-even ROAS, set entirely by your margin.
The numbers and how they relate
- ROAS = revenue ÷ ad spend (a multiple)
- ACOS = ad spend ÷ revenue (the inverse, as a %)
- Break-even ROAS = 1 ÷ gross margin
- Profit after ads = revenue × margin − ad spend
At a 40% margin your break-even ROAS is 2.5×. So a 4× ROAS on $5,000 of spend clears the bar comfortably — $20,000 of revenue at 40% margin is $8,000 of gross profit, minus $5,000 spend leaves $3,000 of real profit. Drop the margin to 20% and that same 4× ROAS barely breaks even.
Using break-even ROAS to set budgets
Break-even ROAS turns advertising from guesswork into a rule. Once you know the number your margin requires, you can set target ROAS or maximum ACOS on each campaign, bid accordingly, and cut spend that falls below the line. It also reframes the classic tension: a campaign scaling volume at a ROAS just above break-even can be worth more than a tiny, ultra-high-ROAS one, if the goal is growth and the unit economics hold.
Connect it to your unit economics
ROAS lives inside the bigger picture of what a customer is worth. If ads acquire customers who buy again, judge spend against lifetime value, not a single order — run the numbers through our LTV & CAC calculator. And if you sell on Amazon, model the platform's fees alongside ad cost with the Amazon FBA calculator to see true per-unit profit after both.
→ Beyond the calculator
Raising money for a marketing-driven business?
Ad efficiency is a core assumption in any e-commerce or DTC plan. Our business plan writers turn your ROAS, margins, and growth targets into the funding-ready case investors expect.
Frequently asked questions
- ROAS (return on ad spend) = revenue from ads ÷ ad spend. Spend $5,000 to generate $20,000 in sales and your ROAS is 4× — four dollars back for every one spent. It's a gross, top-line measure: it doesn't account for the cost of the product itself, which is why break-even ROAS matters.
- There's no universal target — a 'good' ROAS is one above your break-even ROAS, which is set by your gross margin. At a 25% margin you need a 4× ROAS just to break even; at a 50% margin, 2× does it. So a 4× ROAS is a healthy profit at high margins and a wash at low ones. Always judge ROAS against margin, not a benchmark.
- They're inverses of each other. ROAS = revenue ÷ spend (a multiple, higher is better). ACOS (advertising cost of sale, common on Amazon) = spend ÷ revenue (a percentage, lower is better). A 4× ROAS is the same as a 25% ACOS. Use whichever your platform reports; this calculator shows both.
- Break-even ROAS = 1 ÷ gross margin. If your product carries a 40% gross margin, your break-even ROAS is 1 ÷ 0.40 = 2.5×. Below that, each advertised sale loses money after product cost; above it, ads are profitable. It's the single most useful number for setting bids and budgets.
- Yes — it runs in your browser, nothing is stored, and there's no sign-up. When you're modeling a marketing budget or an e-commerce brand for a raise, our business plan writers turn ad efficiency and unit economics into a fundable plan.