Calculator
Enter all monetary amounts in the same currency. The calculator returns ratios and amounts in that same basis.
Method and inputs
Formula: ROAS = attributed revenue / ad spend
Inputs: Attributed campaign revenue and the corresponding ad spend.
Worked example
$4,000 attributed revenue from $1,000 ad spend produces 4:1 ROAS, or 400%.
Break-even ROAS by gross margin
ROAS says how much revenue each unit of ad spend brought in, but revenue is not profit. A campaign only pays for itself when the gross profit on the attributed sales covers the ad spend, so the minimum ROAS is 1 divided by the gross margin.
| Gross margin | Break-even ROAS | As a percentage |
|---|---|---|
| 20% | 5 : 1 | 500% |
| 30% | 3.33 : 1 | 333% |
| 40% | 2.5 : 1 | 250% |
| 50% | 2 : 1 | 200% |
| 60% | 1.67 : 1 | 167% |
| 70% | 1.43 : 1 | 143% |
Example: a shop with a 40% gross margin spends $2,000 and records $6,000 of attributed sales, a ROAS of 3 : 1. Gross profit is $6,000 × 0.4 = $2,400, leaving $400 after ad spend, before shipping, returns and payment fees. At a 30% margin the same ROAS would lose $200.
Important limits
ROAS measures revenue relative to advertising spend, not profitability. Attribution model, refunds, agency fees, product cost and customer lifetime value can change the business decision.