ROAS Calculator (Return on Ad Spend)

ROAS (Return on Ad Spend) measures the return on advertising spend. It shows how much revenue each unit of currency spent on ads generates, calculated as ad revenue divided by ad cost. A ROAS of 4.0 means every unit spent returned 4 units of revenue.

ROAS = ad revenue / ad cost. With revenue of 10,000 and ad cost of 2,500, ROAS = 10,000 / 2,500 = 4.0 (400%). The higher the value, the more efficiently the campaign converts the ad budget into revenue.

ROAS measures the ratio of revenue to ad cost and ignores margin. ROI shows the real profit: it accounts for gross margin and subtracts the ad cost. A campaign with a high ROAS can have a low or negative ROI if the product margin is thin.

Break-even ROAS is the minimum ROAS at which a campaign makes no loss. It is calculated as 100 / gross margin (in %). At a 40% margin the break-even is 2.5. If the actual ROAS exceeds this value, the campaign is profitable.

There is no single universal value — a good ROAS depends on margin. A shop with a 50% margin needs a ROAS above 2.0, while a shop with a 20% margin only breaks even above 5.0. Always compare ROAS with the break-even point derived from margin, not an absolute figure.

ROAS is a revenue metric, not a profit metric — it looks at total revenue rather than the profit left after covering product costs. That is why ROAS alone cannot judge profitability. The calculator also computes net profit and ROI, which factor in gross margin.

Net profit = gross profit − ad cost, where gross profit = ad revenue × gross margin / 100. With revenue of 10,000, a 40% margin and a cost of 2,500, gross profit is 4,000 and net profit is 4,000 − 2,500 = 1,500.

No. ROAS and the net profit computed here relate only to the result of the ad campaign. They do not include the company fixed costs (rent, salaries, logistics). To assess full profitability, include those costs in a separate analysis.

A negative net profit means the margin generated by the campaign did not cover the ad cost — the campaign made a loss. In that case, lower the acquisition cost, increase the margin or improve the conversion rate to raise ROAS above the break-even point.

No. The calculator is indicative and meant for a quick profitability check. The real result depends on exact costs, returns, taxes and fixed costs. For budget decisions, consult a marketing or finance specialist.