Online stores often judge ads by ROAS, but a ROAS that looks high can still lose money if margins are thin.
How to use the Break-Even ROAS Calculator
- Profit margin before ads
- Ad spend
- Revenue from ads
Results update as you type, and every field accepts the units shown in its menu.
How it works
If each sale keeps a given margin, ad revenue must be at least ad spend divided by that margin to cover the ads.
Inputs explained
| Field | What to enter |
|---|---|
| Profit margin before ads | In % |
| Ad spend | Amount in your currency |
| Revenue from ads | Amount in your currency |
What each result means
- Break-even ROAS = 100 ÷ [Profit margin before ads]
- Actual ROAS = [Revenue from ads] ÷ [Ad spend]
- Profit after ads = [Revenue from ads]×[Profit margin before ads]÷100 – [Ad spend]
Example values
How the main result changes when Profit margin before ads changes and everything else stays at the example values above:
| Profit margin before ads (%) | Actual ROAS (×) |
|---|---|
| 20 | 3.2 |
| 30 | 3.2 |
| 40 | 3.2 |
| 50 | 3.2 |
| 60 | 3.2 |
| 80 | 3.2 |
Formula
Break-even ROAS = 1 ÷ profit marginROAS = revenue ÷ ad spendWorked example
Inputs — Profit margin before ads: 40 %; Ad spend: $1,000; Revenue from ads: $3,200.
Results — Break-even ROAS = 2.5 ×; Actual ROAS = 3.2 ×; Profit after ads = $280.00.
Key terms
- ROAS
- Return on ad spend, revenue divided by ad cost.
Frequently asked questions
What is a good ROAS?
Anything above your break-even ROAS is profitable on a first-order basis.
Does this include customer lifetime value?
No; repeat purchases can justify a lower first-order ROAS.
What formula does the Break-Even ROAS Calculator use?
Break-even ROAS = 1 ÷ profit margin.