ROAS Calculator

How to use the ROAS calculator

1. Enter ad spend for a campaign, ad set or period, exactly as the ad platform reports it.
2. Enter the revenue from those ads. This is the conversion value or attributed sales the platform reports for the same spend and dates.
3. Enter your gross margin. This is the share of each sale left after the cost of the product: (price − product cost) ÷ price. If you pay shipping, payment processing or marketplace fees on each order, subtract them too.
4. Enter the profit you want after ads, as a percentage of revenue, to get a target ROAS you can set in a bidding strategy.

The ROAS result is shown both as a multiple (4.2×) and as a percentage (420%), because Google Ads sets targets as a percentage while many reports and marketplaces use the multiple.

ROAS and ACoS formulas

Worked example from Amazon Ads. Amazon’s guide to advertising cost of sales spends $50 on a campaign that earns $100. ACoS is $50 ÷ $100 = 50%, and ROAS is $100 ÷ $50 = 2. The two are reciprocals: ROAS = 100 ÷ ACoS%.

Break-even example. A store with a 40% gross margin keeps $0.40 of each sales dollar before advertising. To cover $1 of ad spend it needs $1 ÷ 0.40 = $2.50 of ad revenue, so its break-even ROAS is 2.5 (250%), and its break-even ACoS is 40%. At $1,000 of spend and $4,200 of revenue, gross profit is $1,680, and $680 is left after the ads.

Why break-even ROAS depends on your margin

ROAS on its own does not say whether ads make money. A 3× ROAS is profitable for a product with a 50% margin (break-even 2×) and loses money on one with a 25% margin (break-even 4×). That is why the same ROAS can be great for one store and a problem for another.

Amazon’s guide makes the same point from the ACoS side: to stay profitable, ACoS has to be lower than your profit margin. Break-even ACoS and gross margin are the same number.

Setting a target ROAS

Break-even means the ads pay for themselves and nothing more. To keep a profit, subtract the share of revenue you want to keep from your margin before inverting. With a 40% margin and a goal of keeping 10% of revenue after ads, the room for ad cost is 30% of revenue, and the target ROAS is 1 ÷ 0.30 = 3.33×, or 333%.

Google Ads describes Target ROAS bidding the same way: you set a target such as 500%, and the system tries to keep conversion value per unit of cost at that level across the campaign. Individual conversions will come in above and below it. The target only works if the conversion values you send are accurate, so check that tracked revenue matches your store’s orders before you lean on it.

If the target ROAS is not reachable at the margin you have, the result shows a dash. The fix is outside advertising: raise prices, lower product costs, or accept a smaller profit share.

Getting the margin right

Most ROAS mistakes come from the margin, not the ad numbers. Use the margin on the products the ads actually sell, not your store-wide average. If a campaign mostly sells a low-margin bestseller, its break-even ROAS is higher than your store average suggests.

Include the variable costs of each order: the product itself, inbound freight, packaging, outbound shipping if you pay it, payment processing and marketplace fees, and an allowance for returns. Leave out fixed costs such as rent and salaries; those are paid from the profit after ads, not from each order. If you know markup rather than margin, convert it: margin = markup ÷ (1 + markup), so a 100% markup is a 50% margin.

What ROAS does not show

ROAS measures revenue the platform attributes to ads within its attribution window. It does not show customers who saw an ad and bought later through another channel, or customers who would have bought anyway. It also counts only the first order: a customer who comes back for years is worth more than one sale, which is why some businesses accept a ROAS below break-even on campaigns that bring in new customers.

Compare ROAS only within the same platform and attribution setting. A seven-day click window and a one-day window on the same campaign can produce noticeably different numbers. When in doubt, check total store revenue and total ad spend over the same months; that blended ratio is harder to flatter.

Using break-even ROAS to plan an ad budget

Break-even ROAS also tells you how much revenue a budget has to produce. At a 40% margin, a $3,000 monthly budget needs $3,000 × 2.5 = $7,500 in ad revenue just to cover itself, and $3,000 × 3.33 = $10,000 to leave a 10% profit. If a campaign is running well below that after enough data, the choice is to improve conversion, raise prices or margin, or cut spend.

When testing a new campaign, set a spend limit you are willing to lose while the platform learns, and judge it on a full attribution window rather than the first few days, since late conversions often arrive days after the click.

Review the margin input whenever prices, product costs or shipping rates change. A supplier price increase that cuts your margin from 40% to 35% raises break-even ROAS from 2.5 to 2.86 overnight, even if the campaign itself has not changed.

Sources & assumptions

How this calculator gets its numbers. Full method: our methodology.

• ROAS = ad revenue ÷ ad spend; ACoS = ad spend ÷ ad revenue × 100.
• Gross margin = (price − cost of the product) ÷ price. Include payment fees, shipping and returns in the cost if you pay them.
• Break-even ROAS = 1 ÷ gross margin: the ROAS at which gross profit from ad sales equals the ad spend.
• Target ROAS for a profit share p = 1 ÷ (margin − p).
• Revenue is taken as reported; attribution windows and repeat purchases are not modeled.

Sources

1. Amazon Ads, What is ACOS? Advertising Cost of Sales. ACoS = ad spend ÷ ad revenue × 100 and ROAS = ad revenue ÷ ad spend, with the example of $50 spent and $100 earned (ACoS 50%, ROAS 2); to stay profitable, ACoS has to be lower than the profit margin (break-even ACoS).
2. Google Ads Help, About Target ROAS bidding. ROAS is conversion value per unit of cost, expressed as a percentage target (for example 500%), and depends on accurate conversion values.

Last reviewed November 2, 2026. Ad platforms measure conversions differently; compare ROAS only within the same platform and attribution setting.