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Marketing / ROAS Calculator

ROAS Calculator

Get return on ad spend, ACoS and the break-even ROAS for your margin, and see whether the ads made money after product costs.
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$

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Price minus product cost, as a % of price. Sets break-even ROAS.

ROAS
4x
400%ROAS %
25.0%ACoS
2.5xbreak-even ROAS
$0revenue $6,000.00
  • Product cost
  • Ad spend
  • Profit after ads
Revenue from ads$6,000.00
Product cost · 60.0% of revenue−$3,600.00
Ad spend−$1,500.00
Profit after ads$900.00

Any ROAS above 2.5x covers product cost and ads at a 40% margin.

See breakdown

How the ROAS calculation works

  1. ROAS is ad revenue divided by ad spend

    $6,000 of sales from $1,500 of ads is a 4.0x ROAS, also written as 400%.

  2. Break-even ROAS comes from your margin

    Divide 1 by your gross margin. At a 40% margin you need 2.5x just to cover product cost and ads.

  3. ACoS is the same ratio flipped

    ACoS = ad spend ÷ revenue. A 4.0x ROAS is a 25% ACoS, and ROAS = 1 ÷ ACoS.

  4. Profit after ads is what matters

    Gross profit minus ad spend. $6,000 at 40% margin is $2,400 gross profit, minus $1,500 of ads leaves $900.

  5. Work backwards from a target

    Pick revenue or ad spend in the Solve for list to see what a target ROAS requires.

Worked example. $1,500 of ads brings $6,000 in sales at a 40% gross margin. ROAS is 4.0x (400%), ACoS 25%, break-even ROAS 2.5x. After $3,600 of product cost and the $1,500 of ads you keep $900.

ROAS FAQ

What is ROAS?

ROAS (return on ad spend) is the revenue your ads bring in for each dollar spent on them. Google Ads describes it as the conversion value, such as revenue, you get per dollar of ad spend.

What is the ROAS formula?

ROAS = revenue from ads ÷ ad spend. Multiply by 100 for a percentage. $5,000 from $1,000 of ads is a 5x ROAS, or 500%.

How do I calculate break-even ROAS?

Break-even ROAS = 1 ÷ gross margin. At a 25% margin it's 4x; at 50% it's 2x. Below it, the ads cost more than the gross profit they bring in.

How do I convert ACoS to ROAS?

ROAS = 1 ÷ ACoS (as a decimal). A 20% ACoS is a 5x ROAS, and a 4x ROAS is a 25% ACoS.

What is a good ROAS?

There is no single number. Google Ads tells advertisers to set a target from their business goals and past results. A good ROAS is one above your break-even ROAS. On $6,000 of sales from $2,000 of ads (3x), a 60% margin product keeps $1,600 after ads, while a 25% margin product loses $500, because it needs 4x to break even.

What is target ROAS in Google Ads?

Target ROAS is a Google Ads bid strategy. You set the average conversion value you want per dollar of ad spend, and Google sets bids to try to reach it. Google's example: $5 in sales ÷ $1 in ad spend × 100% = a 500% target ROAS.

Is ROAS the same as ROI?

No. ROAS compares revenue with ad spend only. ROI compares profit with the full cost, so it accounts for product cost and other expenses.

Sources: Google Ads Help: About Target ROAS bidding

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