ROAS measures ad efficiency, not profit
ROAS is revenue divided by ad spend — it tells you how much revenue each ad dollar generates, but revenue is not profit. A 5x ROAS on a low-margin product can still lose money once cost of goods, shipping, and returns are factored in. That is why ROAS is usually read alongside a margin figure, not on its own.
Why break-even ROAS matters
Tick Enable Break-Even Analysis and enter your gross margin, and this calculator computes your break-even ROAS — the minimum ROAS needed just to cover the cost of goods sold (Break-Even ROAS = 1 ÷ Gross Margin). If your actual ROAS is below that number, the campaign is losing money even though it is generating revenue.
Reading the ad-spend scaling chart
The chart shows how revenue and profit would scale if you spent more or less at this same ROAS. Because profit is proportional to ad spend at a fixed rate, this campaign is either profitable at every spend level or unprofitable at every level — there is no single "break-even spend amount" to look for; use the break-even ROAS figure above instead.
What this calculator does not cover
This models ad spend and revenue at a single point in time — it does not account for attribution windows, multi-touch conversion paths, or costs beyond cost of goods sold (fulfillment, returns, overhead). For overall business profitability rather than ad efficiency, see the ROI Calculator.