ROAS calculator: formula & ₹ example

ROAS is revenue attributed to ads ÷ ad spend. The calculator returns a multiple. Worked example: ₹2 lakh in attributed revenue divided by ₹50,000 in spend equals 4.00× ROAS. Written as a percentage, that is 400%.

The result shows revenue credited to each rupee of advertising. Compare it with your contribution-based break-even ROAS to decide whether the return leaves enough for overhead and profit.

How to use the ROAS calculator

Enter advertising spend for one channel and one date window. Enter the purchase revenue that your chosen attribution method credits to that spend. Use the same currency in both fields. The calculator divides revenue by spend and shows both the multiple and percentage.

For a platform view, take both figures from the same platform report. For a store-wide view, use retained store revenue and total ad spend. That second calculation is often called a blended revenue-to-spend ratio or MER. Label it so a colleague does not mistake it for the platform's attributed ROAS.

Google Ads Help defines conversion value per cost as conversion value divided by cost. For ecommerce, check that the conversion value represents the purchases you intend to evaluate. A value assigned to a lead is a different measurement from money earned on an order.

Record the window beside the output. A monthly ratio without its month is hard to compare or reproduce. Keep the revenue source and attribution setting in the same row as the result so the next person can calculate it again.

Worked example: ₹50,000 of ad spend

The example campaign spends ₹50,000 and is credited with ₹2 lakh in purchase revenue for the reporting window. The inputs and results are:

The campaign reports ₹4 of revenue per ₹1 spent on advertising. Subtract product, payment and delivery costs before assessing contribution after ads. The following cost comparison shows why the margin changes the budget decision.

Suppose those non-ad variable costs total ₹1.2 lakh. Contribution before ads is ₹80,000. Subtract the ₹50,000 spend and ₹30,000 remains towards overhead and profit. If the same revenue instead carries ₹1.6 lakh of non-ad variable costs, advertising leaves a ₹10,000 loss before overhead.

Both versions report 4.00× ROAS. Their order economics differ. That is why a campaign target should start with the margin rather than a round multiple copied from another account.

ROAS versus ROI and acquisition cost

ROAS uses revenue in the numerator and advertising in the denominator. A profit-based return calculation uses a profit figure and a clearly defined investment base. Write the exact formula before calling a number ROI. Different cost scopes can produce different answers from the same trading month.

Customer acquisition cost asks another question: how much did the business spend to acquire each new customer? Its denominator is customers, not revenue. A campaign selling expensive products can report a strong ROAS while paying a high amount to acquire each buyer.

Use the CAC formula and calculator when the decision concerns first-time customers. Do not divide spend by all purchases and label it CAC. Repeat orders can lower cost per order without changing the cost of acquiring a new person.

Use the break-even ROAS formula when the decision concerns the maximum ad cost the order can bear. That tool turns your own contribution into a minimum revenue ratio, which makes the observed ROAS more useful.

How refunds change the ROAS calculation

Decide whether the report uses booked purchase value or retained revenue after refunds and cancellations. Both can be useful for different tasks, but the distinction must remain visible. Booked value shows the original purchase events. Retained revenue supports a closer view of the money left in the business.

In the worked campaign, suppose ₹20,000 of the original ₹2 lakh is later refunded. Retained revenue becomes ₹1.8 lakh. Against the same ₹50,000 spend, the retained revenue ratio is 3.60×. The original purchase-event ratio can remain 4.00× if those later changes have not reached the ad report.

Avoid subtracting refunds twice. If the revenue export already removes them, do not remove the same amount again in a separate adjustment. Reconcile the starting sales total with the final retained total and keep the arithmetic visible.

For COD, a placed order may not become a delivered, paid order. Keep acquisition reporting and fulfilment reporting connected. Judge a completed trading period on orders far enough through the delivery cycle for the question being asked, and keep recent unfulfilled orders visible separately.

How to combine ROAS across campaigns

Add revenue and spend first, then divide. An average of displayed campaign ratios ignores how much money each campaign used.

Split the same campaign total across two campaigns:

The simple average of 5.00 and 3.75 is 4.375×. It overstates the combined result because the stronger ratio came from the smaller campaign. Summed revenue divided by summed spend preserves the money actually involved.

This combination works within a consistent attribution system. Adding separately attributed platform revenues can count the same order more than once. Meta and Google may both claim a purchase. For a business-wide ratio, use a deduplicated store revenue total rather than adding both platforms' claimed revenue.

Keep attribution comparisons beside the trading result, not hidden inside it. A clean worksheet can show Meta's reported value, Google's reported value and store revenue in separate columns without pretending they add up to a single sales figure.

What is a good ROAS for your store

The useful floor depends on contribution before ads. A store retaining little from each sale needs a higher revenue ratio to fund the same acquisition cost. A store with more contribution can afford a lower ratio, provided the remaining amount covers its other commitments.

Start with the realised selling price. Remove discounts and refunds, use a consistent tax basis and subtract non-ad variable costs. Then calculate the advertising allowance after reserving the contribution the business needs. Compare the observed return with that requirement.

Repeat customers can affect the decision, but use observed cohort contribution rather than an assumed lifetime value. If future orders are intended to repay today's acquisition spend, write down the repayment window and the cash needed to bridge it.

Also inspect what changes at the margin. When increasing the budget, compare the added spend with the extra retained revenue and contribution. Keep offer changes and stock interruptions in the review notes so a ratio is not interpreted without its trading context.

Zero spend and a practical reporting checklist

Zero revenue with positive spend gives 0× ROAS. Zero spend makes ROAS undefined, including when revenue is also zero. Enter positive spend to obtain a defined result. Negative input amounts are rejected; investigate a net negative trading period in the underlying sales and refund report.

Before using the result in a budget meeting:

• Match currency, reporting dates and time zone.
• Verify the purchase value includes the revenue basis you chose.
• Check whether refunds, cancellations and failed deliveries have reached that value.
• Aggregate money before dividing and keep platform attribution separate from store revenue.
• Compare the result with your current contribution-based floor.

Save the input sheet with the decision. When next month's result changes, that record lets you distinguish a shift in media efficiency from a change in price, refunds or measurement.