Free toolTOFU
ROAS calculator
The short answer
Revenue minus product cost, as % of revenue.
ROAS
4.00x
Every ₹1 of ads returned ₹4.00 in revenue
Break-even ROAS at this margin
1.82x
Gross profit after ad spend
₹1,50,000
Contribution before fixed costs.
ACoS (spend ÷ revenue)
25.0%
Calculations run in your browser. Nothing you type is stored or sent anywhere. Outputs are planning estimates, not guarantees.
How to read the result
Your ROAS on its own is a ratio without context. The number that matters is the gap between it and your break-even ROAS (1 ÷ gross margin). Above the line, each additional rupee of spend adds contribution. Below it, you're buying revenue at a loss — which is occasionally a deliberate strategy for a first order, but should never be an accident.
Worked example
A brand does ₹5,00,000 in ad-attributed revenue on ₹1,25,000 of spend at 55% gross margin:
- ROAS = 5,00,000 ÷ 1,25,000 = 4.0x
- Break-even ROAS = 1 ÷ 0.55 = 1.82x
- Gross profit after ads = (5,00,000 × 0.55) − 1,25,000 = ₹1,50,000
Comfortably profitable — and with room to spend more even if ROAS falls, as long as it stays above 1.82x.
What this calculator doesn't include
- Returns and RTO, which inflate the revenue figure — use the break-even ROAS calculator for that
- Fixed costs, salaries and platform fees — this is contribution, not net profit
- Double-counted revenue when Meta and Google both claim the same sale
- The difference between new and returning customer revenue
ROAS formula and examples
| Ad spend | Revenue from ads | ROAS |
|---|---|---|
| ₹50,000 | ₹1,50,000 | 3x (300%) |
| ₹1,00,000 | ₹4,00,000 | 4x (400%) |
| ₹2,00,000 | ₹5,00,000 | 2.5x (250%) |
ROAS can be written as a ratio (4:1), a multiple (4x) or a percentage (400%). Whether a ROAS is good depends on your margins — see the break-even ROAS calculator.
How to improve ROAS
- Raise conversion rates with better landing pages
- Increase AOV with bundles and upsells
- Cut spend on placements and audiences that don't convert
- Refresh creative to fight fatigue
- Exclude existing customers from prospecting
ROAS by channel: what to expect
| Channel | Typical pattern |
|---|---|
| Brand search | Very high ROAS, partly non-incremental |
| Retargeting | High ROAS, partly non-incremental |
| Prospecting | Lower ROAS, more incremental |
| Marketplaces | Varies with competition and organic rank |
ROAS formula variations
- ROAS (multiple): revenue ÷ spend — e.g., 4.0x
- ROAS (percentage): (revenue ÷ spend) × 100 — e.g., 400%
- Break-even ROAS: 1 ÷ contribution margin percentage
- MER: total revenue ÷ total marketing spend
Frequently asked questions
What ROAS should I aim for?
Whatever clears your break-even ROAS with enough headroom for fixed costs. There's no universal target.
Should I use revenue before or after discounts?
After discounts and before tax — the revenue you actually collect. Using list price inflates ROAS.
Why is my calculated ROAS different from Ads Manager?
Ads Manager attributes conversions using its own windows and modelling. Use your store's revenue for the true number, and platform ROAS only to compare campaigns within that platform.
What is the difference between ROAS and ROI?
ROAS compares revenue to ad spend; ROI compares profit to total investment. See ROAS vs ROI.
Should GST be included in ROAS revenue?
Use revenue excluding GST so you compare like with like — GST isn't income to the business.
Is a higher ROAS always better?
Not if it comes from shrinking spend to only the easiest sales — growth often requires accepting lower ROAS on new customers.
What's the difference between this and the break-even ROAS calculator?
This calculator shows the ROAS you achieved; the break-even ROAS calculator shows the ROAS you need to be profitable.
Should ROAS be calculated per campaign or overall?
Both — per campaign for optimisation, overall (MER) for business health.
Can ROAS be used for lead generation?
Yes, if you assign values to leads based on conversion rates and deal values.
More free tools
All toolsTerms behind the maths
Free growth audit
Find out where your budget is leaking.
Send us your ad account, analytics or site. Within 72 hours you get a written audit: tracking gaps, wasted spend, and the three moves we'd make first. No pitch deck.