ROAS/ROI Calculator
Calculate return on ad spend and true return on investment after cost of goods.
About ROAS/ROI Calculator
ROAS ignores the cost of goods, so a campaign can show a healthy ROAS while losing money. The break-even ROAS is the reciprocal of the gross margin, which is the threshold that actually matters. At a 62 per cent margin, break-even sits around 1.6 times ad spend, so a ROAS of 2 that looks strong is in fact only modestly profitable once goods and other costs are counted.
Formula
ROAS/ROI
ROAS = revenue ÷ ad spend; ROI = (gross profit − total cost) ÷ total cost
- ROAS
- Revenue divided by ad spend, ignoring the cost of the goods sold
- break-even ROAS
- The ROAS at which gross profit exactly covers ad spend
Worked example
With the default values below, ROAS/ROI Calculator returns Return on Ad Spend of 4.000. Change any input above and every figure here is recalculated in your browser.
Inputs used
- Revenue generatedminimum 0
- 48,000
- Advertising spendminimum 0
- 12,000
- Gross marginaccepts 0–100 %
- 62 %
- Other campaign costsminimum 0
- 2,500
Results
- Return on Ad Spend
- 4.000 x
- Return on Investment
- 105.24%
- Gross Profit
- $29,760.00
- Net Profit After All Costs
- $15,260.00
- Break-Even Return on Ad Spend
- 1.613 x
Step by step
- 1Values used
- 2ROAS/ROI
- 3Return on Ad Spend= 4.000 x
- 4Return on Investment= 105.24
- 5Gross Profit= 29,760.00
- 6Net Profit After All Costs= 15,260.00
- 7Break-Even Return on Ad Spend= 1.613 x
Assumptions and limits
- The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
- In particular, this calculator does not take inflation, tax or compounding frequency into account.
- Figures are rounded for display to 3 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.
Frequently Asked Questions
How is ROAS/ROI calculated?
ROAS = revenue ÷ ad spend; ROI = (gross profit − total cost) ÷ total cost ROAS ignores the cost of goods, so a campaign can show a healthy ROAS while losing money. The break-even ROAS is the reciprocal of the gross margin, which is the threshold that actually matters.
Why does ROAS/ROI matter?
At a 62 per cent margin, break-even sits around 1.6 times ad spend, so a ROAS of 2 that looks strong is in fact only modestly profitable once goods and other costs are counted.
What values do I need to enter?
This calculator takes 4 inputs: Revenue generated, Advertising spend, Gross margin, Other campaign costs. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.