Return on Ad Spend Goal Calculator

About this calculator

Return on ad spend (ROAS) tells you revenue generated per dollar of ad spend, but a high ROAS number alone does not guarantee profitability — it depends on your gross margin. The ROAS you actually need to hit a target profit margin is derived from your gross margin and target margin: required ROAS = 1 / (gross margin − target margin), and the maximum cost-per-acquisition you can afford is max CPA = order value × (gross margin − target margin).

Performance marketers and e-commerce owners use this before setting bids in Google Ads or Meta Ads, because a campaign can show a "good" 3x ROAS and still lose money once cost of goods, shipping and returns are factored into the margin. Setting the target ROAS or max CPA up front, rather than reacting to platform-reported ROAS, keeps bidding aligned with actual profit goals.

This calculator takes your average order value, gross margin and target profit margin and returns the ROAS you must hit and the maximum CPA you can pay, so you can set bid caps that protect your margin instead of just chasing revenue.