ROAS Calculator
Return on Ad Spend (ROAS) measures revenue generated per unit of advertising cost. It is a primary tactical metric for campaign performance and budget allocation.
This calculator computes ROAS as Revenue ÷ Ad Spend and also shows ROAS as a percentage, estimated gross margin, and the break‑even ROAS (the minimum ROAS needed to avoid a loss after variable costs). Use consistent attribution windows and cost scopes when comparing campaigns.
Use the fields to enter currency values in the same unit (e.g., USD). Results assume the revenue and costs you enter are already attributed to the campaign using your chosen attribution model.
Governance
Record 41f42d07df5a • Reviewed by Fidamen Standards Committee
Inputs
Results
ROAS (Revenue ÷ Ad Spend)
5
ROAS (%)
50000.00%
Gross Margin (%)
3600.00%
Break‑even ROAS (minimum to avoid loss)
2.7778
| Output | Value | Unit |
|---|---|---|
| ROAS (Revenue ÷ Ad Spend) | 5 | ratio |
| ROAS (%) | 50000.00% | — |
| Gross Margin (%) | 3600.00% | — |
| Break‑even ROAS (minimum to avoid loss) | 2.7778 | ratio |
Visualization
Methodology
ROAS (ratio) = revenue ÷ ad_spend. ROAS (%) = (revenue ÷ ad_spend) × 100. These are direct arithmetic relationships; they assume revenue and ad spend are measured for the same attribution window and currency.
Gross margin used here is a simple campaign-level margin: ((revenue − COGS − other variable costs) ÷ revenue) × 100. This represents the share of revenue available to cover fixed costs, overhead and profit.
Break‑even ROAS is computed as revenue ÷ (revenue − COGS − other variable costs). Algebraically this equals 1 ÷ gross_margin_fraction. If gross margin fraction is zero or negative, break‑even ROAS is undefined and the campaign cannot break even on ad spend alone.
Practical guidance: align your attribution window (click-to-conversion window, view-through rules), include platform fees and fulfillment costs in variable costs where appropriate, and use multi-touch or incremental lift analysis for strategic decisions. Regulatory and disclosure considerations for advertising practices are covered by federal guidance; consult official sources when adapting claims and creatives.
F.A.Q.
What is a good ROAS?
A 'good' ROAS depends on product margins, fixed costs and business goals. Evaluate ROAS against your break‑even ROAS and long‑term unit economics rather than a universal target. For margin-sensitive businesses, aim for ROAS well above break‑even to cover overhead and profit.
How should I treat attribution windows and multi‑touch attribution?
Use the same attribution window and model when comparing ROAS across campaigns. Multi‑touch attribution and incrementality testing can reveal the true incremental revenue driven by ads; this calculator uses directly attributed revenue you provide and does not replace experiment-based lift measurement.
Why might break‑even ROAS be undefined or negative?
Break‑even ROAS requires positive gross margin. If (revenue − COGS − other variable costs) ≤ 0, the business is losing money on attributed sales before ad spend, so no finite ROAS on ad spend alone will produce profit.
Can I use this for services or subscription businesses?
Yes, but for subscriptions consider using a lifetime value (LTV)-based view: attribute an appropriate portion of expected LTV to the campaign period or compute break‑even across the expected customer lifetime rather than a single transaction.
What are common sources of error or misinterpretation?
Mixing currencies, mismatched attribution windows, excluding platform fees or fulfillment costs, and using gross revenue instead of incremental revenue are common pitfalls. Always document the scope of revenue and costs used in the calculation.
Sources & citations
- U.S. Small Business Administration — Market Your Business — https://www.sba.gov/business-guide/manage-your-business/market-your-business
- Federal Trade Commission — Advertising and Marketing Guidance for Businesses — https://www.ftc.gov/tips-advice/business-center/advertising-and-marketing
- MIT OpenCourseWare — Analytics and Marketing resources — https://ocw.mit.edu
- FASB — Financial Accounting Standards Board (GAAP) — https://www.fasb.org/
- SEC — Financial Reporting Manual — https://www.sec.gov/corpfin/cf-manual
- AICPA — American Institute of CPAs — https://www.aicpa-cima.com/
Further resources
Versioning & Change Control
Audit record (versions, QA runs, reviewer sign-off, and evidence).
Record ID: 41f42d07df5aWhat changed (latest)
v1.0.0 • 2025-11-08 • MINOR
Initial publication and governance baseline.
Why: Published with reviewed formulas, unit definitions, and UX controls.
Public QA status
PASS — golden 25 + edge 120
Last run: 2026-01-23 • Run: golden-edge-2026-01-23
Versioning & Change Control
Audit record (versions, QA runs, reviewer sign-off, and evidence).
What changed (latest)
v1.0.0 • 2025-11-08 • MINOR
Initial publication and governance baseline.
Why: Published with reviewed formulas, unit definitions, and UX controls.
Public QA status
PASS — golden 25 + edge 120
Last run: 2026-01-23 • Run: golden-edge-2026-01-23
Engine
v1.0.0
Data
Baseline (no external datasets)
Content
v1.0.0
UI
v1.0.0
Governance
Last updated: Nov 8, 2025
Reviewed by: Fidamen Standards Committee (Review board)
Credentials: Internal QA
Risk level: low
Reviewer profile (entity)
Fidamen Standards Committee
Review board
Internal QA
Entity ID: https://fidamen.com/reviewers/fidamen-standards-committee#person
Semantic versioning
- MAJOR: Calculation outputs can change for the same inputs (formula, rounding policy, assumptions).
- MINOR: New features or fields that do not change existing outputs for the same inputs.
- PATCH: Bug fixes, copy edits, or accessibility changes that do not change intended outputs except for previously incorrect cases.
Review protocol
- Verify formulas and unit definitions against primary standards or datasets.
- Run golden-case regression suite and edge-case suite.
- Record reviewer sign-off with credentials and scope.
- Document assumptions, limitations, and jurisdiction applicability.
Assumptions & limitations
- Uses exact unit definitions from the Fidamen conversion library.
- Internal calculations use double precision; display rounding follows the unit's configured decimal places.
- Not a substitute for calibrated instruments in regulated contexts.
- Jurisdiction-specific rules may require official guidance.
Change log
v1.0.0 • 2025-11-08 • MINOR
Initial publication and governance baseline.
Why: Published with reviewed formulas, unit definitions, and UX controls.
Areas: engine, content, ui • Reviewer: Fidamen Standards Committee • Entry ID: 121182d83935