ROAS measures how much revenue you generate for every dollar spent on advertising.
ROAS = Revenue / Ad Spend. A ROAS of 4x means $4 earned per
Minimum breakeven ROAS depends on your gross margin. If margin is 50%, you need at least 2x ROAS to break even.
Use this calculator when preparing for a business decision that depends on this metric. Calculating the figure in advance — rather than estimating — prevents the kind of imprecision that leads to suboptimal choices.
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.
Depends on your margins. Generally 3–5x is good for e-commerce. Below 2x is usually unprofitable.
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