> For the complete documentation index, see [llms.txt](https://docs.moleculedata.com/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.moleculedata.com/understanding-your-data/net-roas.md).

# Net ROAS

ROAS counts money that was never yours. Net ROAS counts what you keep — and tells you when an ad is actually profitable.

**ROAS** — return on ad spend — is revenue divided by what you spent to get it. Spend 2,500 and make 10,000, and your ROAS is 4.0.

The problem is what "revenue" includes.

## ROAS counts money that was never yours

Total Sales includes:

* **VAT**, which you collect on behalf of the state and then hand over.
* **Shipping**, which you collect and then pay to a courier.
* **Orders that came back**, which you refunded.

None of that pays for your ads. **Net Sales** takes it out: it strips tax and shipping and subtracts discounts and returns. **Net ROAS** is Net Sales divided by spend.

## The same month, both ways

A shop on 21% VAT spends 2,500 on ads and takes 10,000 in sales, of which 500 was shipping and 800 came back as returns.

|               |           |
| ------------- | --------- |
| Total Sales   | 10,000    |
| less VAT      | −1,736    |
| less shipping | −500      |
| less returns  | −661      |
| **Net Sales** | **7,103** |
| Ad spend      | 2,500     |
| **ROAS**      | **4.0**   |
| **Net ROAS**  | **2.8**   |

Same ads, same spend, same month. One number is a story you tell at a dinner party; the other is the one your accountant would recognise.

## Your break-even Net ROAS

Here is the part nobody tells a first-time advertiser. Net ROAS has a break-even point, and you can work it out in one line:

{% hint style="success" %}
**Break-even Net ROAS = 1 ÷ your gross margin**

At a 40% margin you need **2.5** just to break even. At 50%, you need **2.0**. At 25%, you need **4.0**.
{% endhint %}

This turns an intimidating dashboard into a decision. The shop above, at a 45% margin, breaks even at 2.2 and is running at 2.8 — profitable, with room to push. Judged on ROAS 4.0 alone, the same owner would have assumed far more headroom than they have.

If you do not know your gross margin, the [Products report](https://docs.moleculedata.com/dashboards/products) shows revenue and profit per product once your product costs are set in Shopify.

{% hint style="warning" %}
Break-even here means break-even on the **first** order. A customer who comes back can justify a lower Net ROAS than this — see Cohorts & LTV for what a repeat buyer is worth.
{% endhint %}

## Where to find it

* On the [Dashboard](https://docs.moleculedata.com/dashboards/dashboard), **Net ROAS** and **Net Sales** are metric cards and columns in every drill-down table, so you can read them per source, campaign, ad set, ad and country.
* On [Live Today](https://docs.moleculedata.com/dashboards/live-today), Net Sales and Net ROAS are live tiles for the current day.

## Why the two can differ slightly

{% hint style="info" %}
**Live Today** works from money actually collected today, minus the tax and shipping Shopify reports on those orders.

The **Dashboard** uses the accounting view: de-taxed revenue less discounts and returns, with a return counted on the day it was refunded rather than the day of the original order.

On a normal day the two agree. On a day with refunds they can differ, because they are answering "what came in today" and "what did this period actually earn".
{% endhint %}