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Google Ads ROAS Calculator

Marketing ToolsYour ROAS, and the break-even ROAS your margin actually demands.

₹

₹

%

What is left after the cost of the goods or service itself.

₹

x

Your ROAS

4x

Profitable — you keep ₹60,000

revenue ÷ ad spend

Break-even ROAS: 2.5x

At a 40% margin you need 2.5x just to cover costs. You are at 4x.

1 ÷ 0.40 = 2.5

  • Losing money0 – 2.5×
  • Thin2.5 – 3.13×
  • Healthy3.13 – 5×
  • Strong5 – 6.25×

Bands are arithmetic, not industry folklore: they are multiples of your own break-even, so they hold whatever you sell. The scale runs to 6.25×.

Profit ROAS
1.6x
on gross profit
(revenue × margin) ÷ ad spend
Gross profit
₹1,60,000
revenue × margin
Max CPA at target
₹400
average order value ÷ target ROAS
Conversions for target
250
(target ROAS × ad spend) ÷ average order value

ROAS measures revenue, not profit. A 4x return is a loss at a 20% margin and healthy at 50% — which is why break-even ROAS is the number to manage against.

How this is calculated

ROAS            = revenue / ad spend
Profit ROAS     = (revenue x gross margin) / ad spend
Break-even ROAS = 1 / gross margin
Max CPA         = average order value / target ROAS

How it works

ROAS divides the revenue a campaign produced by what you spent to produce it. A 4x ROAS means four rupees of revenue for every rupee of ad spend. It is the standard reporting metric in every ads platform, and on its own it does not tell you whether you made money.

The number that does is break-even ROAS, which is simply the inverse of your gross margin. At a 20% margin you keep ₹20 of every ₹100 in revenue, so you need 5x just to cover the ad spend — a 4x campaign is losing money while the dashboard shows a healthy-looking return. At a 50% margin, break-even is 2x and that same 4x campaign is excellent.

This is why two businesses can look at identical ROAS figures and reach opposite conclusions. Calculate your break-even once, and every ROAS number afterwards becomes meaningful instead of merely large.

Worked example

₹1,00,000 spent, ₹4,00,000 revenue, 20% gross margin

  1. ROAS = 400000 / 100000 = 4x
  2. Break-even ROAS = 1 / 0.20 = 5x
  3. Gross profit = 400000 x 0.20 = 80000
  4. Net profit = 80000 - 100000 = -20000

4x ROAS — and a ₹20,000 loss, because break-even was 5x

How to use it

  1. Enter your ad spend and the revenue attributed to it.
  2. Set your gross margin — what is left after the cost of the goods or service itself, before overheads.
  3. Read your ROAS against the break-even ROAS shown beside it. Above it you are profitable, below it you are not.
  4. Add an average order value and a target ROAS to see the maximum you can pay per conversion and how many conversions the target needs.

What this tool does not do

  • It uses the revenue figure you enter. Platform-reported revenue is usually optimistic because of attribution windows.
  • It does not account for returns, refunds or cancellations, which can be significant in ecommerce.
  • Gross margin is treated as constant across all orders. In practice it varies by product mix.

Frequently asked questions

How do you calculate ROAS?

Divide the revenue a campaign generated by the amount you spent on it. ₹4,00,000 of revenue from ₹1,00,000 of spend is a 4x ROAS, sometimes written as 400%.

What is a good ROAS?

There is no universal answer — it depends entirely on your gross margin. A 4x ROAS is a loss at a 20% margin and strong at a 50% margin. Calculate your break-even ROAS first; that is the only benchmark that means anything for your business.

What is break-even ROAS?

The ROAS at which a campaign exactly covers its own cost. It equals 1 divided by your gross margin. At a 40% margin, break-even ROAS is 1 / 0.40 = 2.5x.

What is the difference between ROAS and ROI?

ROAS compares revenue to ad spend only. ROI compares profit to total cost, including cost of goods and any management fees. ROAS is the operational metric; ROI is the business one.

Should I use revenue or profit in the ROAS calculation?

The standard definition uses revenue, which is what ad platforms report. Profit ROAS — revenue multiplied by margin, divided by spend — is more honest, and this calculator shows both.

How do I work out my maximum cost per acquisition?

Divide your average order value by your target ROAS. At a ₹2,000 AOV and a 5x target, you can pay at most ₹400 per conversion.

Why does my platform ROAS differ from my actual revenue?

Ad platforms attribute conversions using their own windows and models, and generally count a conversion they had any contact with. Reconcile against your own order data before making budget decisions on the platform figure.

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Last updated 3 September 2026.