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Three numbers every ad account decision hangs on: your ROAS (revenue ÷ spend), your break-even ROAS (1 ÷ gross margin — the line below which ads lose money), and the maximum CPA you can profitably pay per order. A 4× ROAS sounds great until you remember a 25% margin business breaks even at exactly 4× — context the raw ratio never gives you.
Frequently asked questions
What's a good ROAS?
Whatever clears your break-even with room to spare. At 50% gross margin, break-even is 2× and 3–4× is healthy; at 25% margin, 4× is break-even and you need 5×+ to profit. There's no universal benchmark — only your margin's.
How do I calculate break-even ROAS?
1 divided by gross margin. 40% margin → 1 ÷ 0.4 = 2.5× — every $1 of ad spend must return $2.50 in revenue just to break even on the ad cost.
ROAS or CPA — which should I optimize for?
They're two views of the same economics: max profitable CPA = AOV × margin. CPA suits lead-gen and stable order values; ROAS suits varied baskets. The calculator shows both so the ad platform's number ties back to actual profit.