ROAS Calculator
ROAS equals revenue divided by ad spend. Break-even ROAS = 1 ÷ gross margin. 60% margin → 1.67x break-even; 40% → 2.5x; 30% → 3.33x. Below break-even, every sale loses money before considering CAC payback. Strip view-through credit for honest reporting.
- ROAS = revenue ÷ ad spend.
- Break-even ROAS = 1 ÷ gross margin %.
- Platform-reported ROAS over-states by 25–40% via view-through credit.
Meta default ≈ 30% inflation; Google ≈ 20%
VTC stripped
1 ÷ gross margin
ROAS = Revenue ÷ Ad Spend · Break-even ROAS = 1 ÷ Gross Margin · Click-only = Reported × (1 − VTC%)- Pull revenue + spend from your platform.
- Estimate VTC inflation: Meta ~30%, Google ~20%.
- Compare click-only ROAS against break-even at your gross margin.
- Margin contribution / ad ₹ above ₹1 means each ad rupee returns >₹1 in margin.
Frequently asked questions
Why is break-even ROAS not always 1?
ROAS of 1 means revenue equals spend — but the goods + delivery cost money. Break-even = revenue covers COGS too. At 40% gross margin, you need 2.5x ROAS to break even on COGS. CAC payback layers on top of that.
How do I strip view-through credit?
In Meta Ads Manager: switch attribution window to '7-day click' only (no view). In Google: data-driven attribution defaults to multi-touch which can over-credit. Compare platform numbers to GA4 (server-side) for honest ROAS.
What's a healthy D2C ROAS?
Indian D2C beauty: 1.8–4.5x typical. Fashion: 1.5–3.5x. Subscription (over LTV): 2.5–6x. The right target depends on your gross margin.
Should I optimize for ROAS or CAC?
CAC. ROAS is a channel-efficiency metric; CAC is a unit-economics metric. Use ROAS for in-channel optimization; CAC for business decisions.
Want this applied to your business?
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