Profitable CPC advertising requires: Revenue × Margin > Ad Spend. ROAS ≥ 4x is the typical healthy threshold.
Break-even CPC = (AOV × Gross Margin × Conversion Rate).
ROAS of 2x may be profitable at 60% margin, but loss-making at 30% margin.
Reach for this calculator when you need to present a business metric to stakeholders. Accurate, consistently-defined figures command more credibility than estimates, particularly in financial discussions.
Many business metric errors arise from using the wrong time period for the calculation. Annualising a figure from a seasonal month, or averaging a figure that changes over time, can produce misleading results that don't reflect steady-state performance.
A startup founder uses the calculator to determine break-even point: fixed monthly costs £12,000, variable cost per unit £18, selling price £42. Break-even is 500 units per month — a concrete sales target that the team can evaluate against pipeline and capacity.
Return on Ad Spend = Revenue ÷ Ad Spend. ROAS of 4 means you earn $4 for every
CPA should be less than your gross profit per order. CPA < (AOV × gross margin) = profitable campaign.
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