🎯 ROAS Calculator
Calculate Return on Ad Spend from ad revenue generated and advertising cost.
What Is a Good ROAS?
ROAS = Ad Revenue ÷ Ad Spend. A 4x ROAS means you earn $4 for every $1 spent on ads. But whether 4x is good depends entirely on your gross margin. At 40% margin, break-even ROAS = 100 ÷ 40 = 2.5x — so 4x is profitable. At 20% margin, break-even ROAS = 5x — making 4x unprofitable. Always calculate break-even ROAS first.
Break-Even ROAS Formula
Break-Even ROAS = 1 ÷ Gross Margin Ratio = 100 ÷ Gross Margin %. At 50% gross margin: break-even = 2x ROAS. At 30%: 3.33x. At 25%: 4x. Your target ROAS should exceed break-even to ensure overall profitability after operating expenses beyond COGS.
People Also Ask
Calculate your break-even ROAS from your gross margin, then target 1.5–2× that number to ensure profitability after all business costs. A common starting target is 4x, but this is meaningless without knowing your margins. A business with 70% gross margin can be profitable at 1.5x ROAS; one with 20% margin needs 5x+.
ROAS = Ad Revenue ÷ Ad Spend. ROI = (Ad Revenue − Ad Cost) ÷ Ad Cost × 100. At 4x ROAS, ROI = 300% (earned $3 for every $1 spent, after recovering the $1 investment). ROAS ignores the cost side; ROI includes the cost. For ad campaign evaluation, ROAS is the more commonly used metric.