Break even analysis in business plan

Updated on: Mar 18, - PM. A break-even analysis is a financial tool which helps a company to determine the stage at which the company, or a new service or a product, will be profitable. In other words, it is a financial calculation for determining the number of products or services a company should sell or provide to cover its costs particularly fixed costs. Break-even is a situation where an organisation is neither making money nor losing money, but all the costs have been covered. Break-even analysis is useful in studying the relation between the variable cost, fixed cost and revenue.
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Break-Even Analysis Template

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Financial Section of Business Plan | How to Write and What to Include

Our free break even analysis templates help you to determine your break even point. A break-even analysis or break-even point is a calculation that determines how much of a good or service needs to be sold in order to cover the total fixed costs. It examines the margin of safety for a business based on the revenues earned from the normal business activities. The break-even analysis determines the level of sales that the business must have, but it is a document intended only for internal usage. Therefore, it is not recommended to be provided to investors, regulators, and other financial institutions.
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Break Even Point and Operating Expenses

Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. If you continue browsing the site, you agree to the use of cookies on this website. See our User Agreement and Privacy Policy. See our Privacy Policy and User Agreement for details. The breakeven analysis is especially useful when you're developing a pricing strategy, either as part of a marketing plan or a business plan.
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What is a break-even analysis? A break-even analysis is a critical part of the financial projections in the business plan for a new business. Financing sources will want to see when you expect to break even so they know when your business will become profitable.
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