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 ?
The formula for break even analysis on sales is shown below:
From the credit manager's perspective, break even analysis is valuable in a variety of ways, including:
Break even analysis tests the validity of assumptions made by your customer about the likely success of their business.
Certain assumptions that were made in constructing the break even analysis shown above were made to simplify the calculation.
The financial aspects of each model, including the MD Buyline average purchase price, service cost per year, break even analysis, and cost of ownership
Finally, it explains how project analysis is conducted using techniques such as sensitivity analysis, scenario and break even analysis, and Monte Carlo simulation.
Cost mitigation strategies Raising barriers to entry and level of risk for publishers Next gen publishing break even analysis Introduction Break even analysis I: Single platform Break even analysis II: Multi-platform Publisher strategies for the next-generation Exploiting online business models Key features of next generation console online services PlayStation Network Platform Microsoft Xbox Live Microsoft XBL non-gaming content strategy Nintendo Virtual Console Next generation software analysis Introduction Games publishing pipelines Platform exclusivity Five million unit sales New IP - who is taking most risks?