Break-even Analysis Templates
Originally published: 04/05/2021 07:39
Publication number: ELQ-18993-1
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Break-even Analysis Templates

Break-even and Profit-Volume- Cost Analysis

Description
This excel file is made up of three (3) spreadsheets which are:
- The break-even Analysis sheet
- Simple Break-even Analysis sheet and
- The Profit Volume- Cost Analysis sheet.

Overview and Importance of Break-even Analysis:

The break-even point (BEP) or break-even level represents the sales amount—in either unit (quantity) or revenue (sales) terms—that is required to cover total costs, consisting of both fixed and variable costs to the company. Total profit at the break-even point is zero.

Break-even analysis tells you how many units of a product must be sold to cover the fixed and variable costs of production. The break-even point is considered a measure of the margin of safety. Break-even analysis is used broadly, from stock and options trading to corporate budgeting for various projects.

A break-even analysis results in neither a profit nor a loss. Instead, it determines the number of sales needed to cover all variable and fixed costs. It calculates the minimum number of units to sell and the sales volume needed to pay all expenses before making a profit.

It might not seem like much of a business goal; it's an important reference for your financial people. Your break-even points provide important benchmarks for long-term planning.

This Best Practice includes
1 Excel file

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Further information

To analyze the break-even of a business

Provide a benchmark for long term business planning

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