Return on Ad Spend (ROAS) Calculator
Turn ad revenue and ad cost into ROAS, its ratio, and the ACoS — plus the break-even ROAS your margin requires.
How it works
ROAS = ad revenue ÷ ad spend · ACoS % = spend ÷ revenue × 100 · Break-even ROAS = 1 ÷ margin%
ROAS is the gross revenue earned for every dollar of advertising — a 4× ROAS means $4 back for each $1 spent. On its own it ignores product cost, so a strong ROAS can still lose money on a thin margin. The break-even ROAS, the reciprocal of your gross margin, is the line you must clear: at a 40% margin you need a 2.5× ROAS before the ads contribute any profit.
Worked example
Ads costing $5,000 generate $20,000 in sales, so ROAS is 20,000 ÷ 5,000 = 4×. ACoS is 5,000 ÷ 20,000 = 25%. At a 40% gross margin, break-even ROAS is 1 ÷ 0.40 = 2.5×, so the 4× result clears it comfortably.
Frequently asked questions
What is the difference between ROAS and ROI?
ROAS compares revenue to ad spend only; ROI compares profit to total cost. A 4× ROAS can still be unprofitable if your margin is below 25%, because ROI accounts for the cost of the product while ROAS does not.
What is ACoS?
Advertising Cost of Sale is ad spend divided by revenue — the inverse of ROAS expressed as a percentage. A 4× ROAS equals a 25% ACoS. Sellers on ad platforms like Amazon often target ACoS directly.
What ROAS should I aim for?
At least the break-even ROAS set by your margin, plus a buffer for overhead and returns. A common target is 3–4×, but a low-margin business may need much higher and a high-margin one can profit at lower ROAS.
Related calculators
Educational estimate, not financial or tax advice.