HomeFree toolsROAS calculator
ROAS calculator
Enter your ad spend and the revenue it brought in to see your return on ad spend. Add your gross margin to get your break-even ROAS and the profit left after paying for ads.
Worked example.
A Harrogate candle shop spent £1,200 on Meta ads last month, tracked £4,200 in sales from them and makes a gross margin of 40% on its candles.
- Ad spend
- £1,200
- Revenue from ads
- £4,200
- Gross margin
- 40%
ROAS is 3.50x (350%) and break-even ROAS is 2.50, so the ads are above break-even and profitable. After paying for the ads, the shop keeps £480 of gross profit.
How it works.
The maths and the rules behind the tool, so you can check it yourself.
ROAS (return on ad spend) tells you how much revenue each pound of advertising brings back. A ROAS of 3.50x means every £1 you spent on ads came back as £3.50 in sales.
Revenue is not profit, though. Your break-even ROAS is the point where the gross profit from ad sales exactly covers what you spent on the ads. It depends on your gross margin: the lower your margin, the higher the ROAS you need to break even.
Above break-even, your ads make money after product costs. Below it, the ads cost you more than the gross profit they bring in, even if the ROAS figure looks healthy.
Tips.
Small changes that make the numbers more useful.
- Use your gross margin after product cost, shipping and payment fees, not just the markup on the product. A margin that is set too high makes your break-even ROAS look easier to hit than it is.
- Compare the revenue in Meta or Google Ads with the sales you can see in Shopify or GA4. Each ad platform reports the sales it thinks it drove, and two platforms can claim the same order.
- Judge ROAS over a few weeks rather than a single day. Results swing from day to day, and refunds or delayed purchases can change the picture.
- A ROAS just above break-even still leaves nothing for overheads like rent, wages and software. Set your target a little above break-even so your ads pay towards the rest of the business.
- Repeat customers change the maths. If buyers often come back, a first-order ROAS below break-even can still pay off, so look at customer lifetime value alongside ROAS.
Questions, answered.
What is a good ROAS?
There is no single good number, because it depends on your margin. A good ROAS is one comfortably above your break-even ROAS, so the ads cover product costs and leave a profit. A shop with a 60% margin can do well at a ROAS that would lose money for a shop with a 25% margin.
How do you calculate ROAS?
Divide the revenue from your ads by what you spent on them. If you spent £500 and the ads brought in £2,000, your ROAS is 4.00x, or 400%. Use the same date range for both numbers.
What is break-even ROAS?
Break-even ROAS is the ROAS at which the gross profit from ad sales exactly pays for the ads. You work it out as 1 ÷ (gross margin ÷ 100), so a 40% margin gives a break-even ROAS of 2.50. Above that you make money on your ads, and below it you lose money.
What is the difference between ROAS and ROI?
ROAS only compares ad revenue with ad spend. ROI compares profit with the total cost of an investment, including product costs and other expenses. ROAS is quicker to read inside an ad account, but profit after ad spend tells you whether a campaign actually made money.
Why is my ROAS different in Meta Ads Manager and Shopify?
Each platform uses its own attribution window and its own rules for which clicks or views get credit for a sale. Meta can count a sale from someone who saw an ad without clicking it, while Shopify or GA4 may credit a different channel. Pick one source of truth for decisions and use the others as a guide.
More free tools.
Related calculators and generators. All free tools
Google, Bing, Meta, TikTok, Snapchat and LinkedIn ads.
Want help with the numbers?
Tell us what you need. Charlie will come back with a plan and a price, usually within one working day.