Target ROAS Matrix Calculator

How the Target ROAS Matrix works

The matrix multiplies ten ad spend levels by ten ROAS targets and shows the revenue and profit of every combination, so you can see where scaling starts to pay before you commit budget.

Each profit cell takes revenue, subtracts ad spend, removes the VAT share contained in gross revenue (revenue x rate / (100 + rate)) and subtracts COGS as a percentage of revenue. VAT is treated as included in your prices, which is the standard for EU ecommerce.

Green cells are your strongest scenarios, neutral cells barely clear zero and red cells lose money. If your current ROAS sits in a thin band, the matrix shows how much spend that band can carry.

What ROAS is and how to calculate it

ROAS (return on ad spend) is revenue divided by ad spend: 20,000 in revenue from 10,000 in spend is 2.00x. A plain ROAS calculator stops at that number. This matrix also shows what the revenue leaves you after VAT and product costs, for ten spend levels and ten ROAS levels at once.

Target ROAS vs break-even ROAS

Target ROAS is the return you ask a campaign to hit. Break-even ROAS is where profit is zero, and in this matrix it equals 1 divided by the share of revenue left after VAT and COGS. With 23% VAT in the price and 30% COGS, VAT takes 18.70% of revenue and COGS 30%, which leaves 51.30%. Break-even is therefore about 1.95x, and any target has to sit above it.

The matrix ignores shipping, payment fees and fulfillment, so if those costs matter, get your full number from the break-even ROAS calculator first.

How to use the matrix

Enter VAT % (in price), or 0 if you sell net. COGS margin % is product cost as a share of revenue, so a product that costs 30 and sells for 100 is 30. Set Min Ad Spend and Max Ad Spend to the budgets you want to compare, and Min ROAS and Max ROAS to the returns you want to test. Hover a profit cell to see the revenue, VAT and COGS behind it.

Worked example

These inputs are an illustration, not client data: VAT 23, COGS 30, Min Ad Spend 10,000, Max Ad Spend 200,000, Min ROAS 2, Max ROAS 4. The top left cell, 10,000 spend at 2.00x, has 20,000 revenue, 3,739.84 VAT and 6,000 COGS, so profit is 260.16. That is thin because 2.00x sits just above the 1.95x break-even line. The bottom right cell, 200,000 at 4.00x, makes 210,406.50, which is also what the Peak Profit tile shows.

How to read the colors

Colors are relative to your range. The calculator splits the profit gap between the top left and bottom right cells into quarters: green on top, then yellow, then blue, and neutral for the rest that is still at or above zero. Anything below zero is red. A different range can recolor the same cell, so read the numbers, not only the shading.

Type product cost into COGS margin %, not gross margin. With 23% VAT, 70 instead of 30 moves break-even from about 1.95x to about 8.85x and turns the whole default range red.

Target ROAS Matrix FAQ