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Related to breakeven: Break even analysis

Break Even

1. To make the sales or revenues necessary to cover costs and prevent a firm from operating at a loss. The breakeven may be relatively stable or it may fluctuate, depending on the company or industry. Companies with high breakevens tend to have large fluctuations in earnings from year to year.

2. To sell a security at a price that causes the seller to neither make a profit nor lose money on the sale.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations in earnings.
2. The price at which a security position can be closed out with no profit or loss.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
Fitch's 'AAA' breakeven AP for the covered bond rating will be affected, among other factors, by the profile of the cover assets relative to outstanding covered bonds, which can change over time, even in the absence of new issuance.
Despite first-time entrepreneurs having all the unknowns just discussed, they still must calculate breakeven. But the approach I present in this article builds on the knowledge of the COGS method for calculating breakeven.
We analyze the temporal and spatial variability in energy crop yields and their implications on the relative yield risk for breakeven prices of biomass needed to induce landowners to convert land for energy crop production under various levels of risk aversion.
Specifically, we check the five-year, five-year forward and the ten-year, ten-year forward measures of inflation calculated from swap rates, as well as the breakeven inflation rates.
"For the GCC, the average budget breakeven price stands at a manageable $77 per barrel," notes a Deutsche Bank report.
Many factors determine the breakeven rent-to-price ratio.
The company claimed the breakeven results in the second quarter of 2010 include USD4.7m of pension loss amortization, or USD0.10 per share, after tax and USD1.0m of restructuring, or USD0.02 per share, after tax.
"If they (Orexo) sign some licensing agreements they could reach breakeven in 2010," the analysts said.
In the bond market, this news led to a rally in breakeven rates.
In order to perform effective breakeven analysis using the formulas illustrated above, you need to be able to identify all of your costs and assign them to fixed or variable "buckets." This task is often more difficult than it would seem but going through the process results in a thorough understanding of your business' cost structure.
Now the Bad News: The wind in the UK means that your generator will only be available, on average, 48 hours per week - the break-even now go up to 36 years and if these items are then only switched on for half that time, the breakeven increases to over 70 years.