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ROAS Calculator

Measure actual ROAS and profit, or calculate the target ROAS, ad budget, CPA, and CPC your margin can support.

Calculation mode

Evaluate ROAS and profit from actual campaign results

Example: $8,000
$

Total paid media cost for one reporting period.

Example: $32,000
$

Revenue attributed to the same reporting period.

Example: $2,500
$

Add product, platform, and fulfillment costs for a more complete ROI.

Example: 3.5x
x

Used to calculate target revenue, spend allowance, and the gap to target.

Review the result

ROAS
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ACoS
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Target revenue
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How to use this calculator

Measure results or set a target

Use Measure when revenue and ad spend are known. Use Target before launch to translate gross margin and your required net margin into a minimum ROAS and an allowable ad spend share.

ROAS vs ROI

ROAS compares revenue to ad spend. ROI compares profit to spend. If costs are meaningful, ROI can tell a different story than ROAS.

From target ROAS to bid limits

Average order value turns the allowable ad spend share into a maximum CPA. Adding click-to-purchase conversion rate also estimates a maximum CPC.

ROAS vs break-even ROAS

ROAS is a retrospective result after revenue is known. Break-even ROAS is a planning threshold based on margin and costs before scaling.

Convert ROAS to ACoS

ACoS is ad spend divided by ad-attributed revenue. It is the inverse view of ROAS and is common in marketplace advertising. A 4x ROAS equals 25% ACoS.

What is a good ROAS?

A good ROAS depends on gross margin, refunds, fulfillment, attribution, repeat purchases, and lifetime value. A 4x ROAS can be strong for one product and weak for another.

Common attribution mistakes

Platform ROAS can overstate or understate real returns when attribution windows, refunds, offline revenue, or incrementality are not aligned.

Formula quick reference

  • Actual ROAS = campaign revenue / ad spend
  • Target ROAS = 1 / (gross margin - target net margin)
  • Max CPA = average order value / target ROAS
  • Max CPC = max CPA x click-to-purchase rate
  • ROAS = revenue / ad spend
  • ROAS % = revenue / ad spend x 100
  • ACoS = ad spend / revenue x 100
  • Profit after ads = revenue - ad spend - other costs
  • ROI = profit after ads / ad spend x 100
  • Target revenue = ad spend x target ROAS
  • Max ad spend at target = revenue / target ROAS

Worked example

Campaign return example

Inputs: $8,000 ad spend, $32,000 attributed revenue, $2,500 non-ad costs, and a 3.5x target

Result: 4.00x ROAS, 25% ACoS, $21,500 profit after entered costs, and $28,000 revenue needed at target

Note: Use one reporting window and allow for the platform's conversion-delay period.

Margin-based target example

Inputs: 60% gross margin, 15% target net margin, $80 average order value, and 3% click-to-purchase rate

Result: 2.22x target ROAS, $36 max CPA, and $1.08 max CPC

Note: The 45% margin left after the profit reserve is the maximum share available for ads.

Common mistakes

  • Comparing ad spend from one period with conversion value attributed to another.
  • Treating ROAS as profit without subtracting product, fulfillment, platform, and operating costs.
  • Setting a target from a generic benchmark instead of historical ROAS, conversion delay, and margin.

What the result means

  • There is no universal good ROAS. A workable target must fit gross margin, non-ad costs, cash flow, and the required profit margin.
  • Use historical ROAS as a reference and exclude the most recent conversion-delay period when evaluating performance.

Source notes

  • Google Ads represents ROAS as conversion value divided by cost and can display it as a percentage.
  • Target ROAS bidding needs meaningful conversion values and aims for an average target across conversions, not the same return on every auction.
  • Google Ads: Target ROAS bidding
  • Google Ads: conversion values

ROAS Calculator FAQ

How do I calculate ROAS?

Divide campaign revenue by ad spend.

How do I calculate target ROAS from margin?

Subtract the target net margin from gross margin, express the result as a decimal, then divide 1 by it. A 60% gross margin and 15% target net margin leave 45% for ads, so target ROAS is 2.22x.

What does 4x or 400% ROAS mean?

Both mean the campaign generated four dollars of conversion value for every dollar of ad spend.

Is ROAS the same as profit?

No. ROAS uses revenue. Profit requires product costs, fulfillment costs, and other costs.

Is 4x ROAS good?

It depends on margin, refunds, fulfillment, LTV, and attribution. A product with low margin may need more than 4x.

Can ROAS be below 1?

Yes. A ROAS below 1x means revenue is lower than ad spend before considering other costs.

How do I calculate target revenue from ad spend?

Multiply ad spend by target ROAS. For example, $1,000 spend at a 3x target requires $3,000 revenue.

How much can I spend at a target ROAS?

Divide campaign revenue by target ROAS. The result is the maximum ad spend that would still meet the target.

How is ACoS related to ROAS?

ACoS is ad spend divided by revenue, so it is the inverse of ROAS.