Breakeven Point

Breakeven Point

Formula to calculate breakeven point:
Breakeven Point = fixed costs / contribution margin.



Breakeven point definition and explanation:
The breakeven point is the point at which a business breaks even (incurs neither a profit nor a loss)

The breakeven point is the minimum amount of sales required to make a profit.

Increasing breakeven points (period to period) indicates an increase in the risk of losses.

The breakeven point is included in the financial statement ratio analysis spreadsheets highlighted in the left column, which provide formulas, definitions, calculation, charts and explanations of each ratio.