Google Ads ROAS Calculator

How the calculator works

This calculator takes five inputs and returns five outputs. Here's what each formula does under the hood so you can sanity-check your numbers:

What is ROAS?

ROAS stands for Return on Ad Spend. It's the ratio of revenue generated to money spent on ads. A ROAS of 4x means you earned £4 in revenue for every £1 spent on ads. It's the single most important metric for measuring whether your Google Ads are paying for themselves.

But here's the catch: ROAS measures revenue, not profit. A 4x ROAS sounds great, but if your profit margin is 20%, you're making £0.80 profit per £1 of spend — losing money. This is why break-even ROAS matters.

What is break-even ROAS?

Break-even ROAS is the minimum ROAS you need to not lose money after product costs. It's a function of your profit margin, calculated as:

Examples:

• 40% margin → break-even ROAS = 2.5x
• 30% margin → break-even ROAS = 3.33x
• 20% margin → break-even ROAS = 5.0x
• 10% margin → break-even ROAS = 10.0x

Anything below your break-even ROAS means you're losing money on every order acquired through ads. Many ecommerce advertisers obsess over ROAS targets without knowing their own break-even number — which is why unprofitable campaigns run for months.

What's a good ROAS?

"Good" depends entirely on your margins. Here's a rough benchmark table based on what we see across client accounts:

How to improve your ROAS

If the calculator above shows you're below break-even, you have three levers to pull:

1. Lower your CPA — better keyword targeting, negative keywords, improved Quality Score, sharper audience signals. Usually the first thing to tackle because it compounds across every campaign.
2. Raise your conversion rate — landing page work (see our guide to high-converting ecommerce landing pages), checkout friction reduction, trust signals. Big leverage on ROAS because it multiplies the numerator without touching the denominator.
3. Raise your AOV — bundling, upsells at checkout, tiered pricing. Often the fastest win for established stores.

Full walkthrough: How to Calculate & Improve Your Google Ads ROAS.

Related tool

If your ROAS is below break-even, the next question is where the waste is coming from. Use the Google Ads Waste Calculator to break it down by unprofitable CPA, CPC premium, and landing page gap.