What is ROAS?
ROAS stands for return on ad spend. It compares revenue attributed to advertising with the amount spent on that advertising. If ₹25,000 in advertising is associated with ₹100,000 in revenue, ROAS is 4.0x: four rupees of attributed revenue for every rupee of ad spend.
How to calculate ROAS
ROAS = Attributed Revenue ÷ Advertising Cost₹100,000 ÷ ₹25,000 = 4.00x
4.00 × 100 = 400%
A 1.00x ROAS means attributed revenue equals ad spend. It does not mean the overall business has broken even.
How break-even ROAS works
If gross margin is known, a simplified break-even ROAS can be estimated by taking the inverse of gross margin expressed as a decimal.
Break-even ROAS = 1 ÷ Gross Margin40% margin = 0.40
1 ÷ 0.40 = 2.50x
At a 40% gross margin, ₹2.50 of revenue produces ₹1.00 of gross profit before advertising. In this simplified model, that ₹1.00 covers ₹1.00 of ad spend. Your actual break-even point can be higher after other variable and operating costs.
ROAS vs ROI vs profit
| Metric | Question answered | Expression |
|---|---|---|
| ROAS | How much attributed revenue came from each unit of ad spend? | Revenue ÷ ad spend |
| Revenue − ad spend | What remains after subtracting media cost only? | Revenue − ad spend |
| Contribution after ads | What remains from estimated gross profit after media cost? | (Revenue × gross margin) − ad spend |
| ROI | What return did the broader investment produce? | Depends on the profit/gain and total investment being measured |
What's a good ROAS?
There is no universal ROAS target that is good for every business. Required ROAS depends on margins, repeat purchases, customer lifetime value, refunds, channel role, attribution, operating costs and growth objectives. This calculator therefore does not label an arbitrary 2x, 3x or 4x as automatically good or bad.
ROAS examples
| Ad spend | Attributed revenue | ROAS | ROAS % |
|---|---|---|---|
| ₹25,000 | ₹100,000 | 4.00x | 400% |
| ₹50,000 | ₹75,000 | 1.50x | 150% |
| ₹80,000 | ₹240,000 | 3.00x | 300% |
| ₹100,000 | ₹100,000 | 1.00x | 100% |
Why attribution matters
The numerator is attributed revenue, so ROAS changes depending on which revenue your measurement system credits to advertising. Advertising platforms and analytics systems can use different attribution rules and windows. Compare campaigns on a consistent measurement basis and know where the revenue number came from.
ROAS Calculator FAQs
No. ROAS compares attributed revenue with advertising cost. ROI is broader and depends on the gain/profit and total investment being evaluated.
Only if you compare revenue with media spend alone. It ignores cost of goods and other expenses, so it is not normally business break-even.
It lets the calculator estimate gross profit, contribution after ad spend and a simplified break-even ROAS.
Yes. The arithmetic is channel-independent as long as spend and attributed revenue cover the same scope and period.
Yes. A 0.80x ROAS means ₹0.80 of attributed revenue for each ₹1 spent.
No. Scale, incremental revenue, margin, customer quality, lifetime value and strategic objectives can all matter.