Return on Ad Spend (ROAS)

Excel Formulas › E-commerce & Marketing

All versions

ROAS is revenue generated per dollar of ad spend — the headline number for paid marketing. A ROAS of 4 means $4 back for every $1 spent.

Quick formula: ROAS from revenue and spend:
=ad_revenue / ad_spend
Ad-attributed revenue over ad spend, as a ratio. Compare to your break-even ROAS, not just to 1.

The example

$20,000 revenue, $5,000 spend.

AB
1ItemValue
2Ad revenue20000
3Ad spend5000 → 4.0x

The formula

The formula:

=B2 / B3 // revenue ÷ ad spend

How it works

How it works:

  1. Divide ad-attributed revenue by ad spend for ROAS.
  2. Often shown as a ratio (4:1) or a percentage (400%).
  3. Compare to your break-even ROAS — 1 / gross_margin — not just to 1.
  4. Segment by campaign, channel, and creative to shift budget to winners.

ROAS of 1 is usually a loss. At a 40% margin, you need a ROAS of 1/0.40 = 2.5 just to break even on the product — before counting overhead. A “profitable” campaign at 3× ROAS might be barely above break-even. Always compare ROAS to your margin-based break-even, not to 1.

Try it: interactive demo

Live demo

Ad revenue, spend, gross margin.

ROAS · Break-even

Variations

As a percentage

400% form:

=ad_revenue / ad_spend

Break-even ROAS

From margin:

=1 / gross_margin

Profit from ads

Margin less spend:

=ad_revenue * gross_margin - ad_spend

Pitfalls & errors

Compare to break-even. A ROAS above 1 can still lose money once margin is considered.

Attribution matters. Use the revenue actually attributable to the ads.

Zero spend. No spend gives #DIV/0!.

Practice workbook

📊
Download the free Return on Ad Spend (ROAS) practice workbook
A ROAS sheet with the percentage, break-even, and profit variants, plus 4 challenges with answers. No sign-up required.

Frequently asked questions

How do I calculate ROAS in Excel?
Divide ad revenue by ad spend: =ad_revenue / ad_spend. $20k on $5k spend is 4x (400%).
What is break-even ROAS?
1 / gross_margin. At a 40% margin you need 2.5x ROAS just to break even on the product.
Is a ROAS above 1 profitable?
Not necessarily — compare to your margin-based break-even, since you only keep the margin, not the full revenue.

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