Enter your ad spend and revenue to see your ROAS. Add your gross margin to see break-even ROAS and estimated profit.
ROAS — return on ad spend — is the simplest health metric in paid advertising: ROAS = revenue from ads ÷ ad spend. Spend ₹50,000 and generate ₹1,75,000 in attributed revenue, and your ROAS is 3.5x, or 350%. This ROAS formula calculator does that division live, formats the result both ways, and — more importantly — puts it next to the number most dashboards ignore: your break-even point.
What counts as a good ROAS? Honestly: it varies too much by industry, margin structure and business model for a single benchmark to be trustworthy. You'll see 4x cited as an e-commerce rule of thumb, but that figure is meaningless without your margins. A software business at 80% gross margin can scale profitably at 1.5x; a dropshipping store at 15% margin is bleeding cash at 5x. The question worth asking is never "is my ROAS good?" — it is "is my ROAS above my break-even?"
Break-even ROAS = 1 ÷ gross margin. Worked example: your gross margin is 40% — of every ₹100 in revenue, ₹40 is left after cost of goods. For ad revenue to cover ad spend, each ₹1 of spend must bring back enough revenue that 40% of it equals ₹1: that is ₹2.50, so break-even ROAS is 1 ÷ 0.40 = 2.5x. Now apply it: at ₹50,000 spend and ₹1,75,000 revenue (3.5x ROAS), gross profit is 40% × 1,75,000 = ₹70,000; subtract the ₹50,000 of ads and you net ₹20,000. Same campaign at a 25% margin? Break-even jumps to 4x, gross profit is ₹43,750, and the "healthy-looking" 3.5x campaign loses ₹6,250. Margin, not ROAS, decides who wins.
ROAS vs ROI: ROAS is revenue ÷ ad spend — a gross, campaign-level dial that's quick to read and quick to act on. ROI is (profit − cost) ÷ cost — it subtracts product costs, platform fees and overheads first, so it tells you whether money was actually made. Use ROAS to steer campaigns week to week; use ROI to judge the channel quarter to quarter.
ROAS vs MER: MER (marketing efficiency ratio) is total revenue ÷ total marketing spend, across every channel at once. It exists because platform-reported ROAS flatters itself — Meta and Google can each claim credit for the same sale. MER can't be gamed by attribution: it is just your books. Many teams run both — platform ROAS for optimisation, MER for truth. If you're deciding where the next rupee of budget goes, our comparison of Meta ads vs Google ads walks through when each platform earns it.
To use the calculator above: pick ₹ or $, enter spend and attributed revenue, and the return on ad spend calculator updates as you type. Add your gross margin and it also shows your break-even ROAS and estimated profit after ad spend — the number your accountant actually cares about. All computation happens in your browser; nothing is stored or sent anywhere.
ROAS (return on ad spend) = revenue attributed to ads ÷ ad spend. If you spent ₹50,000 on ads and they generated ₹1,75,000 in revenue, your ROAS is 175000 ÷ 50000 = 3.5, usually written as 3.5x or 350%. It measures gross revenue per unit of ad spend — it does not account for product costs, which is why break-even ROAS matters too.
It depends entirely on your margins and industry, so treat any single benchmark with suspicion. A 4x ROAS is often quoted as a rough rule of thumb for e-commerce, but a business with 70% gross margins can profit at 2x while a business with 20% margins loses money at 4x. The only universally correct answer: a good ROAS is comfortably above your break-even ROAS, which is 1 divided by your gross margin.
Break-even ROAS is the minimum ROAS at which ad revenue covers both the ad spend and the cost of goods sold — the point of zero profit. The formula is 1 ÷ gross margin. At a 40% gross margin, break-even ROAS = 1 ÷ 0.40 = 2.5x: every ₹1 of ad spend must return ₹2.50 in revenue just to break even. Anything above 2.5x is profit; anything below is a loss even though revenue looks healthy.
ROAS compares gross revenue to ad spend only (revenue ÷ ad spend). ROI compares profit to total cost ((profit − cost) ÷ cost) and accounts for product costs, fees and overheads. A campaign can show a strong ROAS and a negative ROI at the same time if margins are thin. ROAS is the better day-to-day campaign dial; ROI is the better verdict on whether the whole activity made money.
MER (marketing efficiency ratio, sometimes called blended ROAS) is total revenue ÷ total marketing spend across all channels, not per campaign. Because platform attribution overstates or double-counts conversions — the same sale can be claimed by Meta and Google — many teams use campaign-level ROAS for optimisation and MER as the honest top-level check that overall marketing spend is paying for itself.
Knowing the number is step one; moving it is the job. RioCloud Solutions — a digital marketing agency in Chandigarh founded in 2020, serving 100+ brands across 12 countries — runs paid media alongside SEO, content and full-funnel marketing, so ad spend lands on pages built to convert.