The formula, without the mystery.
ROAS = attributed revenue / ad spend; break-even ROAS = price / (price − variable cost)
A worked example
100 sales at 50 generate 5,000 revenue. On 2,000 ad spend, ROAS is 2.5×. With 20 variable cost, contribution after ads is 1,000, before fixed costs.
Does a high ROAS always mean profit?
No. The margin matters. A low-margin product needs a higher ROAS, and fixed overhead still needs to be covered separately.
Keep the assumptions consistent
Use one planning period and one currency. Enter amounts consistently excluding sales tax or VAT. These simplified models do not account for uncertainty, inventory limits, working capital or progressive taxes. Results are planning estimates.