ROAS Calculator
ROAS alone tells you almost nothing — a 4x ROAS is great at a 40% margin and a loss-maker at 15%. This calculator gives you ROAS, break-even ROAS, and target ROAS together, so you know if a campaign is actually making money.
Your numbers
Revenue minus cost of goods, as a %. Needed for break-even ROAS.
Net margin you want left over after ad spend.
Your ROAS
3.20x
Every $1 spent returned $3.20 in revenue.
Ad-level profit
$22.0K
True profit (post-COGS)
$2.8K
Break-even ROAS
2.50x
Target ROAS
4.00x
Profitable, but below target
You're profitable in gross terms, but 3.20x is short of the 4.00x you need to hit a 15% profit margin on this spend.
Why ROAS by itself is a dangerous metric
ROAS looks impressive until you realise you spent ₹10 lakh to make ₹11 lakh in revenue on a product with 20% margins — that's a loss of roughly ₹7.8 lakh once cost of goods is subtracted, dressed up as a “1.1x ROAS.” The number is directionally positive and economically terrible. This is the single most common way performance marketing dashboards lie to the people reading them: they report revenue efficiency, not profit.
The fix isn't a different metric — it's reading ROAS next to your break-even line. Break-even ROAS (1 ÷ gross margin) is the point where ad spend stops being a cost and starts being profitable. Everything below that line is subsidised growth; everything above it is where you actually want to scale.
The three numbers that matter
| Metric | Formula | What it tells you |
|---|---|---|
| ROAS | Revenue ÷ Spend | Revenue efficiency of the spend |
| Break-even ROAS | 1 ÷ Gross margin | The floor — below this, you lose money |
| Target ROAS | 1 ÷ (Margin − Desired profit %) | The ceiling for “good enough to keep scaling” |
Frequently asked questions
What is ROAS?
ROAS (return on ad spend) is revenue generated divided by ad spend. A 4x ROAS means every $1 spent on ads returned $4 in revenue. It's a revenue metric, not a profit metric — a 4x ROAS on a 15% margin product can still lose money.
What is a good ROAS?
There's no universal good ROAS — it depends entirely on your margin. A 40% margin business breaks even at 2.5x ROAS (1 ÷ 0.40). A 15% margin business needs 6.7x just to break even. Always compare your ROAS to your break-even ROAS, not to a generic benchmark.
How do you calculate break-even ROAS?
Break-even ROAS = 1 ÷ gross margin (as a decimal). At a 25% margin, break-even ROAS is 4x — you need $4 of revenue per $1 of ad spend just to cover the cost of goods sold, before any profit.
How is target ROAS different from break-even ROAS?
Break-even ROAS gets you to $0 profit. Target ROAS builds in the profit margin you actually want. Formula: Target ROAS = 1 ÷ (gross margin − desired profit margin). If your margin is 40% and you want to keep 15% net, your target ROAS is 1 ÷ 0.25 = 4x.
Why does my Google Ads or Meta Ads ROAS not match this calculator?
Ad platforms report ROAS off their own attribution window and click/view-through rules, which usually overstates true incremental return. This calculator uses whatever revenue and spend numbers you enter — if you want a more honest number, use revenue from a holdout test rather than platform-attributed revenue.
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New to the terms? See ROAS, break-even ROAS, and incrementality in the marketing glossary.