ROAS Calculator
Compute return on ad spend, convert it to ACOS, and forecast it from your funnel before spending a penny — then check it against the break-even your margin actually requires.
ROAS Calculator
Results recalculate instantly on every keystroke. Nothing you type is transmitted.
What this result does not account for
- Platform-attributed revenue is self-reported and typically inflated.
- Revenue is usually gross of refunds.
- Average ROAS conceals a lower marginal ROAS at the top of the spend curve.
In short: ROAS above 1 does not mean profitable. 66,304 on 24,975 of spend is 2.6548x, which clears a 2.3810x break-even at a 42% margin by only 0.2739 — and would lose money at any margin below 37.6674%.
Formula
ROAS = revenue ÷ ad spend · ACOS = 1 ÷ ROAS
forecast ROAS = (AOV × CVR) ÷ CPC
[('ROAS', 'a revenue ratio, blind to cost of goods'), ('ACOS', 'the same statement inverted'), ('break-even', '1 ÷ contribution margin'), ('forecast', 'computable before you spend')]
Worked Example
- Divide ad-attributed revenue by ad spend.
- Invert it for ACOS if you work on Amazon.
- Compute break-even as one over contribution margin.
- Compare the two — the gap is your real result.
- Forecast from the funnel before committing budget.
66,304 of revenue on 24,975 of spend is a 2.6548x ROAS, or a 37.6674% ACOS. At a 42% contribution margin break-even is 2.3810x, so the campaign clears it by 0.2739 and produces 27,847.68 of contribution against 24,975 of media — 2,872.68 of profit. The funnel forecast confirms it: 128.00 × 2.80% ÷ 1.35 = 2.6548x. At this ROAS any margin below 37.6674% would lose money.
Strengths & Limits Of This Model
Where this engine is strong
- Pairs the ratio with the break-even its margin requires
- Forecasts ROAS from the funnel before launch
- Shows the minimum margin the current ROAS demands
Where it stops
- Attribution-dependent
- Blind to cost of goods by design
Practical Use Cases
Reporting campaign performance
The standard efficiency ratio.
Converting to ACOS
Translating for Amazon reporting.
Pre-launch feasibility
Forecasting from AOV, CVR and CPC.
Checking against margin
Finding the break-even the ratio must clear.
Setting a tROAS bid target
Deriving a figure above break-even.
Methodology & Editorial Standards
Return on ad spend is revenue over spend, with ACOS presented as its exact inverse rather than a separate metric. Break-even is one divided by CONTRIBUTION margin, and the page states that the familiar four-to-one rule is merely that figure at a twenty-five per cent margin. A funnel forecast is computed independently from order value, conversion rate and cost per click, giving a pre-launch feasibility test and a cross-check on the reported result.
Computation runs in IEEE-754 double precision at full internal precision; rounding to two decimal places occurs strictly at the display layer, so no cumulative drift enters the result. All monetary outputs use accounting presentation — grouped thousands, two decimals, negatives in parentheses — so figures can be transcribed directly into a model or working paper. Division-by-zero and out-of-domain inputs return an em-dash rather than a misleading number.
This engine was reconciled against an independent reference implementation and hand-verified for the worked example above before release. Our full five-stage review process is published on the About Us page.
Disclaimer. This calculator is provided for informational and modelling purposes only and does not constitute financial, tax, legal, medical, or engineering advice. Verify all figures with a qualified professional before acting on them.
ROAS Calculator — 10 Expert FAQs
10 analyst-written answers to the questions practitioners actually ask — optimised for voice and answer-engine retrieval.
What is a good ROAS?
There is no universal answer, and anyone offering one without knowing your margin is guessing. The only meaningful benchmark is your break-even ROAS, which is one divided by contribution margin. A 2x ROAS can be excellent at a 70 per cent margin and catastrophic at 20 per cent.
Where does the 4:1 rule come from?
It is simply the break-even ROAS at a 25 per cent margin, retrospectively promoted into a universal target. It has no general validity, and treating it as a goal means either leaving money on the table or losing it, depending on your actual margin.
What is the difference between ROAS and ACOS?
They are the same statement inverted. ACOS is ad spend divided by revenue expressed as a percentage; ROAS is revenue divided by spend. A 4x ROAS is a 25 per cent ACOS. Amazon sellers use ACOS and everyone else uses ROAS.
Can I forecast ROAS before spending?
Yes, and you should. Multiply your average order value by your conversion rate and divide by your expected cost per click. If that forecast sits below your break-even, the campaign cannot be made profitable by optimisation — the economics have to change first.
Why does ROAS fall as I increase spend?
Because you exhaust the most responsive audience first. Every incremental dollar reaches people less likely to buy, so marginal ROAS is always below average ROAS. The right moment to stop scaling is when the MARGINAL return hits break-even, not the blended figure.
Is platform-reported ROAS accurate?
Treat it as directional. The platform that spent your money also decides how much revenue to claim, and the sum of attributed revenue across channels routinely exceeds actual revenue. Use platform ROAS to optimise inside a channel and blended figures to judge the business.
Should ROAS use revenue or gross profit?
Conventionally revenue, which is exactly why it needs pairing with margin. Some operators compute profit on ad spend instead, using contribution rather than revenue in the numerator, which produces a figure where anything above one is genuinely profitable.
What is target ROAS?
The figure you set as a bidding instruction, and it should sit above break-even by whatever margin you need. Target ROAS equals one divided by contribution margin less your desired net margin, which is always a higher bar than break-even alone.
Does ROAS account for returns?
Not in the revenue figure, which is usually gross of refunds. In high-return categories this materially overstates performance, so either use net revenue or ensure your contribution margin is net of expected returns — but not both, or you will double-count.
How does ROAS relate to ROI?
Directly: ROI equals ROAS multiplied by contribution margin, minus one. That single conversion is why a 4x ROAS at a 20 per cent margin is a negative 20 per cent return, while a 1.8x ROAS at a 65 per cent margin returns a positive 17 per cent.