Break-Even Equation

Break-Even Equation

An equation representing the sales a company requires to simply to cover costs, without losing money or making a profit. A company needs to at least break even in order to make the expense of producing a product worth the effort. As a result, a breakeven equation is an important feature in evaluating the risk of an activity. Breakeven equations calculate the relationship between the fixed costs, variable costs and revenue of the product.
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