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An 80 dollar price with 32 dollars of variable cost
The price is 80. Variable cost, excluding ads, is 32. Ad spend for the period is 5,000. You sold 200 units.
Selling price: 25% lower
Change selling price to 60 while keeping the other example values the same.
Selling price: 25% higher
Change selling price to 100 while keeping the other example values the same.
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Quick answer
What does the Break-even ROAS calculate?
What return on ad spend keeps profit flat after variable cost? This calculator uses selling price, variable cost, excluding ads, ad spend in the period, and units sold to estimate ad return that spends the margin immediately in your browser.
With the values currently entered, the result is 166.7% — break-even return on ad spend. It also shows revenue per ad dollar to break even, actual roas, profit after ads, and contribution margin.
How to use the Break-even ROAS
- Replace the example values with your own numbers.
- Review the result and supporting figures as they update automatically.
- Check the formula and assumptions before using the estimate for a decision.
Inputs used
- Selling price
- Variable cost, excluding ads
- Ad spend in the period
- Units sold — entered in units
Break-even ROAS formula
Margin ratio = (price − variable cost) ÷ price. Break-even ROAS = 1 ÷ margin ratio, shown as a percent. Actual ROAS = revenue ÷ ad spend, shown as a percent.
Assumptions
- Google Ads defines ROAS as conversion value divided by spend, and represents that ratio as a percent. Here conversion value is units × price.
- SBA defines contribution margin as price minus variable cost. Ads stay out of that cost. Returns, platform fees, and a profit target stay out unless you fold them into the numbers you type.
Verify the inputs
Authoritative sources
These sources explain the definitions, factors, or rules behind this tool. Their geographic scope is shown because an official source for one country is not automatically valid somewhere else.
Defines ROAS as return on ad spend, represented as a percentage, calculated as total conversion value divided by total spend.
Break-even pointUS Small Business AdministrationScope: US small-business planning; method is generalDefines contribution margin as the difference between price and the cost to make the product, and writes the ratio as (price − variable cost) ÷ price.
Marketing and salesUS Small Business AdministrationScope: US small-business planning; method is generalTells you to set marketing and sales goals, including a sales increase, and to compare marketing and sales costs with the revenue those efforts generate.
Sources do not endorse Calculum. Check the source date, scope, and your own documents before making a financial, tax, insurance, or reporting decision.
Practical guide
Break-even ROAS example and edge cases
Google Ads defines return on ad spend as conversion value divided by ad spend, and shows that ratio as a percent. SBA defines contribution margin as price minus variable cost. Break-even ROAS is the return where ad spend uses up that margin.
Example: An 80 dollar price with 32 dollars of variable cost
The price is 80. Variable cost, excluding ads, is 32. Ad spend for the period is 5,000. You sold 200 units.
- Selling price
- 80
- Variable cost, excluding ads
- 32
- Ad spend in the period
- 5,000
- Units sold
- 200 units
Calculated result166.7%break-even return on ad spend
Contribution margin is 60 percent, so break-even ROAS is 166.7 percent. That is 1.67 in revenue per ad dollar. Actual ROAS on these sales is 320 percent, and profit after ads is 4,600.
Example results use the default display profile. The calculator above follows your selected country and units.
How to read the result
- Read break-even ROAS first. Then check actual ROAS. Actual can look strong and still sit under the break-even line if the margin is thin.
- Keep ads out of variable cost. If the cost box already includes the ads, the margin is too small and the break-even return is too high.
Edge cases worth checking
The ad platform fee is still outside variable cost
Add a fee you treat as variable, or leave it out and remember the break-even line ignores it. Do not put the same fee in both places.
Conversion value in the ad account is profit
This page treats conversion value as units times price. If your ad account sends profit instead, actual ROAS will not match the account’s report.
What changes the result most
Selling price
Use a current amount for selling price. Include fees or recurring costs that belong in the same figure.
Variable cost, excluding ads
Use a current amount for variable cost, excluding ads. Include fees or recurring costs that belong in the same figure.
Ad spend in the period
Use a current amount for ad spend in the period. Include fees or recurring costs that belong in the same figure.
Try a different scenario
Small changes show whether the answer is stable or sensitive.
Selling price: 25% lower
60214.3%break-even return on ad spend
Selling price: 25% higher
100147.1%break-even return on ad spend
Variable cost, excluding ads: 25% higher
40200%break-even return on ad spend
Common mistakes
Check selling price
Google Ads defines ROAS as conversion value divided by spend, and represents that ratio as a percent. Here conversion value is units × price. Make sure this matches the number you enter.
Keep units sold consistent
SBA defines contribution margin as price minus variable cost. Ads stay out of that cost. Returns, platform fees, and a profit target stay out unless you fold them into the numbers you type. Use the same units and time period throughout the calculation.
Do not rely on one break-even roas scenario
Run a cautious case and an optimistic case. The range is often more useful than one exact-looking number.
Use this result well
What return on ad spend keeps profit flat after variable cost?
It does not replace a quote, contract, accountant, or local employment guidance.