How this calculation works
ROAS compares attributed sales with advertising spend, while the gross-margin input tests whether those sales can pay for the campaign. A large revenue multiple can still lose money when fulfilment and product costs consume most revenue. Match the attribution window, refunds and tax treatment used in both the campaign report and the margin estimate.
Worked example
This example uses illustrative inputs. Your current result is shown above.
₹3,00,000 attributed revenue from ₹1,00,000 ad spend gives ROAS 3×. At a 25% gross margin, gross profit before ads is ₹75,000, leaving a ₹25,000 loss after ads. Break-even ROAS is 100 ÷ 25 = 4×.
Assumptions and limits
- Gross margin is measured before this advertising spend; including the same campaign cost in margin would subtract it twice.
- Revenue attribution is supplied by you. Fixed overhead, repeat purchases, attribution errors and future customer value are not estimated.
Questions people ask
Is ROAS the same as return on investment?
No. ROAS uses revenue over ad spend. Profit-based ROI also depends on the cost of producing and delivering the sales.
Why can a campaign with ROAS above 1 lose money?
Only the gross-margin share of revenue is available to pay for ads. The break-even multiple rises as that share falls.