ROAS Calculator
Measure return on ad spend as a multiple, plus profit-on-ad-spend (POAS) and the break-even ROAS for your gross margin.
Quick answer: Measure return on ad spend as a multiple, plus profit-on-ad-spend (POAS) and the break-even ROAS for your gross margin.
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Frequently asked questions
- What's a good ROAS?
- Depends on your gross margin. With a 25% margin, you need at least 4× to break even on ads. With 50% margin, 2× is break-even. Many performance teams target 3–5× as a healthy growth target.
- ROAS vs. ROI?
- ROAS is revenue / spend (a multiple). ROI is profit / cost (a percentage). ROAS is the standard ad-platform metric; ROI is the ground truth for the business.
- What is POAS?
- Profit on ad spend = (revenue × gross margin) / spend. POAS removes COGS and shows you the actual cash an ad generated, which is what determines whether your ad budget is sustainable.
- Why do I need to enter gross margin?
- Because a 4× ROAS at 25% margin is exactly break-even, but a 4× ROAS at 60% margin is hugely profitable. Without margin, ROAS alone doesn't tell you if you're growing or burning cash.
- Are these inputs uploaded anywhere?
- No — every calculation runs in your browser. We don't see your ad data.
- What is break-even ROAS?
- The minimum ROAS required for an ad to neither make nor lose money on a per-sale basis: 1 / gross margin. At 40% margin, break-even ROAS = 2.5×.
- Should ROAS account for shipping and refunds?
- Yes — push them into the gross margin input. A 50% headline margin minus 10% refunds and 8% shipping = 32% effective margin.
- What about LTV?
- Single-purchase ROAS understates value for subscription or repeat-purchase products. Use customer LTV in place of revenue if you want to include lifetime value.
- Why is my Google/Meta ROAS different from this?
- Ad platforms only count attributed conversions inside their reporting window. The truth is usually somewhere between the platform-reported number and your store-reported revenue.
- How does ROAS relate to MER and blended ROAS?
- MER (marketing efficiency ratio) = total revenue / total marketing spend, across all channels. Use MER as the cross-channel sanity check on per-channel ROAS.