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.
The breakeven point is listed in our efficiency
ratios.
The breakeven point and other ratios are key
to understanding financial statements. Our
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Spreadsheets to
calculate ratios (includes formulas, definitions,
explanations and charts):
See list
of ratios , or the financial statement ratio
analysis spreadsheets which are not highlighted in the
left column, to see which other ratios our
spreadsheets calculate, define and explain.
The breakeven point
may be included in our
custom 1, 3 or 5 period financial
statement ratio analysis spreadsheet.
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explanations for each ratio. (Includes
Breakeven Point and Cash Breakeven Point).
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