breakeven analysis(redirected from Break even analysis)
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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.
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.