ROAS calculator with break-even and target ROAS
This ROAS calculator turns your ad spend and the revenue it produced into return on ad spend, then answers the question that matters more: is that ROAS enough to make money? Enter your profit margin before ads and it shows your break-even ROAS, the target ROAS for the net margin you want, the ROAS needed to hit a profit amount, and how much budget a revenue goal will take.
It suits dropshipping stores, small online sellers and anyone running paid social or search ads. All the arithmetic happens in your browser.
How to use the ROAS Calculator
- Pick a currency and enter your ad spend and the revenue those ads produced.
- Enter your profit margin before ads: the share of each sale left after product cost, payment and marketplace fees, and shipping you pay.
- Optionally set a target net margin, a target profit amount and a revenue goal.
- Read your ROAS, your break-even ROAS and the targets. Change a number and everything updates.
ROAS Calculator features
ROAS and percentage
Revenue ÷ spend as a multiple (4.00×) and as a percentage (400%).
Break-even ROAS
One divided by your margin: the ROAS at which ads pay for themselves and nothing more.
Target ROAS
The ROAS you need for a chosen net margin, or for a chosen profit on your current spend.
Budget for a goal
The spend a revenue goal needs at your current ROAS and at your target ROAS.
The ROAS formulas
ROAS = revenue ÷ ad spend. If $1,000 of ads brings $4,000 of sales, ROAS is 4.0× (400%).
Break-even ROAS = 1 ÷ margin. With a 40% margin you keep $0.40 of every sales dollar, so each ad dollar must bring back $2.50 to cover itself: break-even ROAS is 2.5×. Below that, every ad sale loses money; above it, you profit.
Target ROAS = 1 ÷ (margin − target net margin). To keep 10% of ad revenue as profit on a 40% margin, you need 1 ÷ (0.40 − 0.10) = 3.33×. For a fixed profit goal P on spend S the required ROAS is (S + P) ÷ (margin × S).
Spend needed = revenue goal ÷ ROAS. A $20,000 goal at 4× needs $5,000; at 3.33× it needs $6,000.
ROAS compared with related metrics
Margin must come from your own numbers. Use the profit margin calculator or the marketplace seller profit calculator to find it, and the advertising cost of sale calculator if you sell on Amazon.
| Metric | Formula | Reads as |
|---|---|---|
| ROAS | Revenue ÷ ad spend | Sales per ad dollar; ignores your costs |
| Break-even ROAS | 1 ÷ margin | The minimum ROAS to avoid a loss |
| ACoS | Ad spend ÷ ad sales | The inverse of ROAS, used on Amazon |
| Net margin after ads | Margin − 1 ÷ ROAS | Profit left per sales dollar |
Limits to keep in mind
- ROAS uses the revenue your ad platform attributes to ads. Attribution windows and view-through credit can overstate it.
- Margin here excludes overheads, salaries and returns, so break-even ROAS is the floor for cash profit, not for a healthy business.
- Repeat customers are worth more than their first order; a lifetime-value view can justify a ROAS below break-even on the first sale.
- It is a planning formula, not financial advice.
ROAS Calculator FAQ
What is a good ROAS?
There is no single number. A good ROAS is one above your own break-even ROAS. With a 25% margin you need at least 4×; with a 60% margin, 1.67× is enough.
How do I calculate break-even ROAS?
Divide 1 by your profit margin before ads, written as a decimal. A 40% margin gives 1 ÷ 0.40 = 2.5×.
What is target ROAS?
The ROAS you aim for to reach a profit goal. It is 1 ÷ (margin − the net margin you want to keep). Some ad platforms also offer a bidding setting called target ROAS, which uses a figure like this one.
Is ROAS the same as ROI?
No. ROAS compares revenue to ad spend; ROI compares profit to cost. A 4× ROAS can still be a negative ROI if your margin is under 25%.
Which margin should I use for dropshipping?
Selling price minus supplier cost, payment fees and shipping, divided by the selling price. Leave ad costs out; this tool subtracts them.
Why is my profit negative with a decent ROAS?
Because ROAS above 1× only means ads brought in more revenue than they cost. Product cost and fees come out of that revenue first, so the ROAS must clear break-even.