ROAS Calculator: Return on Ad Spend and Ad Profit
Enter your ad spend and the revenue it generated to get your ROAS, then add the cost of goods to see profit after ads and ROI on the spend. This measures a campaign that has already run. To work out the ROAS you must reach before launching, use the break-even ROAS calculator.
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Formula
ROAS = revenue / ad spendProfit = revenue - (revenue x cost of goods share) - ad spendAd ROI = profit / ad spend x 100Break-even ROAS = 1 / (1 - cost of goods share)
Only ad spend and cost of goods are counted. Salaries, tools, shipping and payment fees are not, so true profit is lower.
Worked example
Ad spend 5,000, revenue 20,000, cost of goods 40%.
- ROAS = 20,000 / 5,000 = 4
- Cost of goods = 0.40 x 20,000 = 8,000
- Profit = 20,000 - 8,000 - 5,000 = 7,000
- ROI = 7,000 / 5,000 = 140%
- Break-even ROAS = 1 / 0.60 = 1.67
Another example
Ad spend 2,500, revenue 7,500, cost of goods 50%.
- ROAS = 7,500 / 2,500 = 3.
- Profit = 7,500 − 3,750 − 2,500 = 1,250.
- ROI = 1,250 / 2,500 = 50%. Break-even ROAS = 1 / 0.50 = 2.
ROAS vs ROI
ROAS is revenue per unit of ad spend and ignores costs. ROI is profit per unit of cost. A ROAS of 3 sounds healthy but is only a 50% return here, and at a thin margin the same ROAS would lose money. The general ROI calculator handles any investment, not just ads.
Common mistakes
- Judging ROAS without margin. A 4 ROAS at 80% cost of goods loses money.
- Using platform-reported revenue that overlaps across channels.
- Leaving out creative, agency and tool costs.
- Ignoring returns, shipping and payment fees.
How it differs
This page measures what happened. The break-even ROAS calculator sets the bar from your price and costs, the CPC calculator prices clicks and CAC counts customers across all spend.
Frequently asked questions
How do you calculate ROAS?
ROAS is revenue from ads divided by ad spend. 20,000 of revenue from 5,000 of spend is a ROAS of 4, often written 4:1 or 400%.
What is the difference between ROAS and ROI?
ROAS ignores costs other than the ads. Here ROI is profit after cost of goods and ad spend divided by ad spend: (20,000 - 8,000 - 5,000) / 5,000 = 140%, while ROAS is 4.
What ROAS do I need to break even?
Break-even ROAS = 1 / (1 - cost of goods share). With 40% cost of goods that is 1 / 0.60 = 1.67, so each 1 of ads must bring in at least 1.67 of revenue.
What is a good ROAS?
It depends on your margin. A ROAS of 4 is common as a target, but a business with a 20% cost of goods breaks even near 1.25 while one with 80% needs 5 just to break even. If you use this to make spending or investment decisions, treat the result as an estimate from the numbers you entered and check it with a qualified adviser.
What is a good ROAS for ecommerce or Facebook ads?
As a rule of thumb, a ROAS around 4 (4:1) is often quoted as a healthy target, but your margin decides what is good. At 40% cost of goods you break even at 1.67, while at 80% you need 5. Compare against your own break-even first, then against benchmarks.
How do I calculate ROAS in Excel or Google Sheets?
Use =revenue/ad_spend. For 20,000 of revenue from 5,000 of spend, =20000/5000 gives 4. Format as a percentage to show 400%, or write 4:1. For ad profit use =revenue*(1-cogs_pct)-ad_spend.
What is the difference between ROAS and CPA?
ROAS is revenue per unit of ad spend; CPA (cost per acquisition) is ad spend per order. They are linked by order value: ROAS = average order value ÷ CPA. With 5,000 of spend and 250 orders, CPA is 20, and at an 80 order value ROAS is 80 ÷ 20 = 4.