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How to Calculate the Break-Even Point – Analysis, Definition, Formula & Examples

To determine the profitability of one’s business, it is important to calculate the break-even point. The Break-even point is the point where your total expenses match the total revenue, a point without any profit or loss, i.e. break-even. To put it in layman’s terms, the point where you finally recover all the capital costs borne to set up the business. Components of break-even analysis There are two components of the break-even analysis: Fixed costs Fixed costs are costs which are determined when an idea goes into the production stage and depends on the level of… Read

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