The break-even point (BEP) is also known as the cost-covering point or the profit threshold. As a key performance indicator (KPI), it represents the point at which a company’s total revenues (including sales revenue) and expenses balance each other out. At the break-even point, total r...
The first step is understanding your break-even point. Doing a break-even analysis will help you determine how much you need to sell to cover your business expenses and eventually make a profit. Read on to learn about the variables involved in running a break-even analysis, how to calculate...
Solving Break-Even Analysis Problems Theformulaused tocalculate a breakeven point (BEP)is based on the linear Cost-Volume-Profit (CVP) Model[1]which is a practical tool for simplified calculations and short-term projections. See reference [1] for more information about this model, and especially...
As with most business calculations, it's quite common that different people have different needs. For example, your break-even point formula might need to be accommodate costs that work in a different way (you get a bulk discount or fixed costs jump at certain intervals). Also, remember that...
Free online break-even calculator. ➤ Easily generate a break-even point graph and estimate how many units needs to be sold for a business to break even. Break-even point calculator which tells you how long it would take you to break even based on fixe
A break-even point in sales dollars of $800,000 [$480,000 divided by 60%] A break-even point in units of product of 40,000 [$480,000 divided by $12 per unit] The break-even calculations are based on the assumption that the change in a company’s variable costs are related to th...
This calculator will compute a company's cash break-even point in terms of both total sales and number of units sold, given the company's fixed cash costs, sales price per unit, and variable costs per unit. The cash break-even point is the sales threshol
Method 1 – Use Generic Formula to Calculate Break-Even Point Let’s take the sample provided as the base for calculations Select the cell where you want the Units Sold at the break-even point – C8. Write the following formula: =C5/(C6-C4) Press Enter to get the result. Method 2 ...
The bigger picture: Why do I need A break even analysis? Break even calculations are a pivotal component in scenario planning. A break even analysis creates a clear snapshot of your financials and helps you see how much revenue you need to bring in to not dip into reserves. With this inf...
Knowing how many units you need to produce to reach your break-even point helps you plan and set goals to keep your company solvent. The accounting calculations may seem dry, but they represent an important and relevant milestone, marking the line between incurring a loss and earning a profit...