ROAS and Break-Even ROAS Calculator
ROAS and Break-Even ROAS Calculator
Return on ad spend from what you spent and the revenue the ads brought in, the break-even ROAS your gross margin needs, the profit left after the ads, and the most you can pay for an order.
Return on ad spend
$1,00,000 of ads bringing $4,00,000 of sales at a 40% gross margin, $2,000 an order
ROAS and break-even ROAS
- revenue
- sales credited to the ads by your attribution model, net of tax
- gross margin
- the share of each sale left after the cost of goods, shipping and payment fees
- CPA
- cost per acquisition: ad spend ÷ orders
Worked example
$1,00,000 of ads bringing $4,00,000 of sales at a 40% gross margin, $2,000 an order
ROAS = 4,00,000 ÷ 1,00,000 × 100% = 400% — $4 of sales for each $1 of ads
Break-even ROAS = 1 ÷ 0.40 = 250%
Gross profit = 4,00,000 × 40% = $1,60,000; after the ads $60,000
200 orders at $500 each; break-even CPA = 2,000 × 40% = $800
Break-even ROAS by gross margin
| Gross margin | Break-even ROAS | Revenue needed per 1 of ads |
|---|---|---|
| 20% | 500% | 5.00 |
| 25% | 400% | 4.00 |
| 40% | 250% | 2.50 |
| 50% | 200% | 2.00 |
| 70% | 143% | 1.43 |
Why ROAS alone can mislead
Return on ad spend divides the revenue credited to your ads by what they cost. Google Ads states it as a percentage — 500% means five in sales for each one spent — and many sellers write the same thing as 5x. In the example $1,00,000 of ads brought $4,00,000 of sales, a ROAS of 400%.
A high ROAS is not the same as a profit, because ROAS is built on revenue. Out of every sale come the cost of the goods, shipping, payment fees and returns; only the gross margin is left to pay for the ads. At a 40% margin, ads have to bring in 2.5 times their cost just to break even — a break-even ROAS of 250%. The rule is simply 1 ÷ margin, so a business on 20% margins needs 500% before its ads earn anything. The same margin caps what you can pay to win an order: at a $2,000 average order and 40% margin, any cost per order above $800 loses money on the first sale. Profit after ad spend here is still before rent, salaries and other overheads.
The revenue figure depends on attribution — which ad gets the credit for a sale. Google Ads now uses a data-driven model by default, with last click as the alternative; other platforms and your own analytics may credit the same sale differently, or twice. Some of the credited buyers would have bought anyway, and a first order can lead to repeat orders the ROAS never sees. Use the same attribution setting when comparing campaigns, and read ROAS alongside the margin and, for repeat buyers, the lifetime value.
For what a repeat customer is worth, see the LTV and CAC calculator; for margins, the profit margin calculator and the contribution margin calculator. This is arithmetic on the figures you enter, not financial advice.
Frequently asked questions
How do you calculate ROAS?
Revenue from the ads ÷ ad spend × 100%. 4,00,000 ÷ 1,00,000 = 400%, or 4x.
What is break-even ROAS?
The ROAS at which gross profit exactly covers the ad spend: 1 ÷ gross margin. At a 40% margin it is 250%; at 25%, 400%.
What is a good ROAS?
Any ROAS above your break-even ROAS covers the ads out of gross margin. There is no universal figure, because margins differ so much between businesses.
Is ROAS the same as ROI?
No. ROAS compares revenue with ad spend; ROI compares profit with the whole investment. A campaign can have a high ROAS and still lose money.
Related calculators
References
- Google Ads Help. About Target ROAS bidding (consulted 22 September 2026): target ROAS is “the average conversion value (for example, revenue) you’d like to get for each dollar you spend on ads”; “$5 USD in sales ÷ $1 USD in ad spend x 100% = 500% target ROAS.”
- Google Ads Help. About attribution models (consulted 22 September 2026): “Attribution models let you choose how much credit each ad interaction gets for your conversions”; data-driven attribution is the default, with last click the other model offered.
- Kotler P, Keller KL. Marketing Management. Pearson. Marketing metrics and profitability: why revenue measures must be read against margin and the full cost of acquiring a sale.