How is ROAS calculated?

ROAS is revenue divided by ad spend. Spending Rs 2,00,000 to generate Rs 8,00,000 in revenue is a 4x ROAS.

What is break-even ROAS?

Break-even ROAS is one divided by your gross margin. On a 45% margin you need roughly 2.2x ROAS to cover the cost of goods and the ad spend - anything above that is profit.

Is a higher ROAS always better?

Not always. Very high ROAS often means you are under-spending on a small, cheap audience. Scaling usually lowers ROAS while raising total profit, which is the number that matters.

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Google Ads ROAS calculator

Model what your ad spend actually returns - projected revenue, orders, cost per order, profit, and the break-even ROAS you need to clear.

your numbers

Monthly ad spend

Rs 2.00 L

Rs 10 KRs 50 L

Target ROAS

4.0x

0.5x15x

Average order value

Rs 2,500

Rs 200Rs 50 K

Gross margin

45%

5%90%

projected monthly revenue

Rs 8.00 L

320

Orders per month

Rs 625

Cost per order

Rs 1.60 L

Gross profit after ad spend

4.00x

Revenue per rupee spent

Break-even ROAS

2.22x

At a 45% margin you break even at 2.22x. Your 4.0x target clears it by 1.78x, so this spend returns a gross profit of Rs 1.60 L a month.

how it's calculated

revenue = spend × ROAS

orders = revenue ÷ AOV

cost per order = spend ÷ orders

gross profit = (revenue × margin) − spend

break-even ROAS = 1 ÷ margin

( how to read it )

What counts as a good ROAS?

ROAS on its own tells you nothing about profit. A 4× ROAS is excellent on a 60% margin and loses money on a 20% margin - which is why the number that matters is your break-even ROAS: one divided by your gross margin. Anything above it is profit; anything below it is buying revenue at a loss.

Use average order value honestly. If you sell a ₹1,200 hero product but most carts are ₹1,900 because of bundles, model the ₹1,900 - your cost per order and order volume both move with it.

Treat the output as a target, not a forecast. It shows what the account has to deliver for the spend to work. Closing the gap between that target and reality is the job - feed quality, campaign structure, landing pages, and creative all move it.

Want these numbers hit in a real account?

Book the free 30-minute audit. We'll show you where the gap between your target and your actual ROAS is coming from, and the order to fix it.

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