How to Calculate ROAS (2026): Formula, Examples and ROAS vs ROI

To calculate ROAS, divide the revenue from your ads by what you spent on those ads. If $500 of ads brings in $2,000 of sales, ROAS = 2,000 ÷ 500 = 4.0, often written 4:1 or 400%. Whether that is profitable depends on your break-even ROAS, which is 1 ÷ your margin before ads: at a 40% margin, it's 2.5.

If you just want the number, our free ROAS calculator works it out from your ad spend and sales, and shows your break-even ROAS, ACoS, profit after ads and the ROAS you need for a target margin. This guide is the longer version: the formula, worked examples for one campaign and several, how ROAS differs from ROI, and the attribution traps that make a ROAS look better or worse than it really is.

What is the ROAS formula?

ROAS (return on ad spend) = revenue attributed to ads ÷ ad spend. It tells you how many dollars of sales each dollar of advertising brought in.

All three describe the same result. Ad platforms such as Meta and Google usually show ROAS as a ratio or a “purchase ROAS” column, while Amazon Ads reports ACoS. To convert: ACoS = 1 ÷ ROAS, and ROAS = 1 ÷ ACoS.

How to calculate ROAS step by step

Pick a date range, take the spend and the sales credited to the ads for that range, and divide.

1. Choose a date range, for example the last 30 days. Short ranges are noisy for small budgets.
2. Get ad spend for that range from the ad platform, including any agency or tool fee you want to count as ad cost.
3. Get attributed revenue for the same range: the “purchase value”, “conversion value” or “ad sales” column. If your platform only gives orders, multiply orders by your average order value.
4. Divide revenue by spend. That's your ROAS.
5. Compare it with your break-even ROAS (1 ÷ margin before ads) to see if the ads made or lost money.

Example 1: one campaign

You spend $1,000 on a campaign and it's credited with $4,000 in sales. ROAS = 4,000 ÷ 1,000 = 4.0. If your margin before ads is 40%, those sales leave $1,600 before ads, and $1,600 − $1,000 = $600 profit after ads.

Example 2: orders and average order value

Your ad platform shows 80 purchases and you know your average order value is $45. Revenue = 80 × $45 = $3,600. With $900 of spend, ROAS = 3,600 ÷ 900 = 4.0.

Example 3: several campaigns (blended ROAS)

Add up spend and revenue across campaigns first, then divide. Don't average the individual ROAS figures, because that gives a small campaign the same weight as a big one.

A simple average of 5.0 and 2.0 would say 3.5, which overstates the result. The true blended ROAS is 2.9.

Is a ROAS of 4 good? Compare it with break-even ROAS

A ROAS is only good or bad compared with your break-even ROAS, which is 1 ÷ your profit margin before ad spend.

Margin before ads means the share of each sale left after product cost, marketplace and payment fees, shipping and packing, but before ads. A ROAS of 4 is comfortable at a 40% margin (break-even 2.5) and a loss at a 20% margin (break-even 5.0). We cover this in detail in break-even ROAS and what is a good ROAS.

Shipping is usually a fixed amount per order, so turn it into a percentage of order value first. With product cost at 35% of revenue, fees at 15%, and $5 shipping on a $45 average order (11.1%), margin before ads is 100% − 35% − 15% − 11.1% = 38.9%, and break-even ROAS is 1 ÷ 0.389 = 2.57. The ROAS calculator takes these exact inputs (product cost and fees as a % of revenue, shipping per order) and does the conversion for you. If you don't know your margin yet, start with how to calculate profit margin.

What is the difference between ROAS and ROI?

ROAS divides revenue by ad spend; ROI divides profit by what you invested. ROAS tells you how much the ads sold, ROI tells you how much they earned.

ROAS is handy because the ad platform can calculate it without knowing your costs. The catch is that two products with the same ROAS can have very different profits. Use ROAS to steer campaigns and ROI (or profit after ads) to judge them.

Why your ROAS might be wrong: attribution caveats

ROAS is only as accurate as the revenue the platform credits to your ads, and every platform credits sales differently.

• Attribution windows differ. A platform may count a sale days after a click, or after someone only saw an ad. Longer windows and view-through credit make ROAS look higher.
• Platforms double count. If a buyer clicked a Meta ad and later a Google ad, both platforms may claim the same order. Adding their reported revenue can exceed your real sales.
• Ads take credit for sales that would have happened. Branded search and retargeting often reach people already planning to buy, so their ROAS flatters them.
• Ads also cause sales they don't get credit for. Someone sees an ad, then searches for your shop days later, and the order shows as organic.
• Returns and cancellations are usually not taken off attributed revenue. A product with a high return rate has a lower real ROAS.
• Tracking gaps. Browser privacy settings and blocked cookies mean some purchases are never reported, or are estimated.

How do I improve my ROAS?

Raise the revenue each ad brings in, or lower what you pay for it. In practice the biggest levers for a small shop are:

• Stronger creative. Clear product shots, a quick hook in the first seconds of a video, and an image sized for the placement (see Facebook ad image size).
• Higher average order value. Bundles and free-shipping thresholds raise revenue per order with the same clicks; see how to increase average order value.
• Better landing pages. Send the click to the exact product, with the photo from the ad and a clear price.
• Cut losers, not budgets. Turn off ads and keywords that spend well past your break-even CPA without sales.

Watch out for chasing ROAS alone. Cutting spend to only your best retargeting audience can push ROAS up while total profit goes down, because you stop reaching new buyers. Profit after ads is the number that pays the bills, and our profit margin calculator includes ad spend per unit if you want to check a single product.

Frequently asked questions

How do you calculate ROAS?

Divide the revenue attributed to your ads by your ad spend for the same period. For example, $4,000 in sales from $1,000 of ads is a ROAS of 4.0, also written 4:1 or 400%.

What is a good ROAS?

A good ROAS is one above your break-even ROAS, which is 1 divided by your margin before ads. At a 40% margin you break even at 2.5, so a 4.0 is profitable; at a 20% margin you need 5.0 just to break even.

Is ROAS a percentage or a ratio?

Either. A ROAS of 4 can be written 4.0, 4:1 or 400%; they all mean $4 of sales for each $1 spent on ads. Amazon's ACoS is the inverse as a percentage, so a ROAS of 4 is an ACoS of 25%.

What is the difference between ROAS and ROI?

ROAS divides ad revenue by ad spend and ignores your costs. ROI divides profit by the investment, so it accounts for product cost, fees and shipping. A 4.0 ROAS at a 40% margin is a 60% ROI on the ad spend.

Should ROAS include shipping revenue and taxes?

Leave out sales tax, since it isn't yours. If buyers pay shipping, it's part of revenue, but then count your shipping cost when you work out your margin and break-even ROAS. Be consistent across periods.

How do I calculate ROAS for multiple campaigns?

Add up the spend and the attributed revenue across all campaigns, then divide total revenue by total spend. Don't average each campaign's ROAS, because that gives small campaigns too much weight.