ROAS calculator
A 4× return sounds excellent. At a 20% margin it is a loss. Enter your margin and the calculator says which you have.
Break-even ROAS is the only benchmark that matters
ROAS is revenue divided by ad spend, and on its own it is close to meaningless, because it counts revenue rather than profit. The threshold that matters is one divided by your gross margin: at a 40 percent margin you need 2.5× just to break even, and at 20 percent you need 5×. This is why identical ROAS figures can mean thriving or dying at two different companies, and why a headline ROAS quoted without a margin tells you nothing.
Above break-even, every additional dollar of spend earns. Below it, scaling is actively harmful — and the trap is that a losing campaign still shows growing revenue as you increase budget, which feels like success right up until the accounts close.
Worth knowing what ROAS hides: attribution. Platform-reported revenue tends to claim credit generously, counting sales that would have happened anyway. If your reported ROAS looks strong but overall business revenue is flat, attribution is usually the reason.
Questions
What is a good ROAS?
Whatever exceeds your break-even, which is one divided by your gross margin. At 40 percent margin that is 2.5×. There is no universal target — anyone quoting one without knowing your margin is guessing.
ROAS or CPA — which should I optimise for?
ROAS suits businesses with varied order values, since it scales with revenue. CPA suits consistent price points. They are two views of the same underlying profitability.
Why does my platform ROAS look better than my bank account?
Attribution. Ad platforms generously credit themselves with sales that may have happened regardless. Compare total business revenue against total spend for the honest picture.