breakeven analysis

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Breakeven Analysis

An analysis of a product or company's sales required to neither lose money nor make a profit, but simply to cover costs. A company needs to at least break even in order to make the expense of producing a product worth the effort. As a result, breakeven analysis is an important feature in evaluating the risk of an activity. Breakeven analysis calculates the relationship between the fixed costs, variable costs, and profit of the product.

breakeven analysis

A mathematical method for analyzing the relationships among a firm's fixed costs, profits, and variable costs. Financial analysts are particularly interested in how changes in output and sales will translate into changes in earnings.
References in periodicals archive ?
7 and break even analysis of 65 to 70 percent," Desai said.
Another tool which will prove useful is break even analysis.
Frank includes a Profit and Loss Statement, Cash Flow Statement, Sales Forecast Statement, Balance Sheet, Business and Personal Financial Statement, Schedule of Real Estate, Operating Budget and much more, including: Profit and Loss Analysis, Cash Flow Analysis, Assets and Liabilities Analysis, Break Even Analysis and Stock Value Analysis.