![]() In general, a company with lower fixed costs will have a lower break-even point of sale. The analysis looks at the level of fixed costs relative to the profit earned by each additional unit produced and sold. ![]() The analysis is for the companies internal use as a metric and calculations are often not required to be disclosed to external sources such as investors, regulators or financial institutions. A demand-side analysis would give a seller greater insight regarding selling capabilitiesīreak-even analysis is useful in the determination of the level of production or in a targeted desired sales mix. It is a calculation to examine your margins for setting your prices when comparing against your cost to produce. Analysing different price levels relating to various levels of demand, an entity uses break-even analysis to determine what level of sales are needed to cover total fixed costs. To break even means you haven’t made any money or lose any money. The verbal phrase in the financial sense is recorded from 1914. break-even (adj.) also breakeven in reference to a balancing of cost and income, usually with point, 1938, from the verbal phrase (1910) see break (v.) + even (adv.). Who coined the term break even? I don’t know and attempts to find out wasn’t very fruitful on a google search.
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