Break-even analysis helps businesses understand when they will start making a profit. It calculates the point where total costs and total revenue are equal, meaning there’s no loss or profit. To find the break-even point, you need to know fixed costs (expenses that don’t change, like rent), variable costs (expenses that change with production), and the price of the product.
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Break Even analysis PPT: Meaning, Importance, Limitations
The break-even point is reached when enough products are sold to cover all costs. Beyond this point, the company starts making a profit. It’s a useful tool for decision-making and financial planning.
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Table of Content for Break Even analysis PPT
- Introduction to Break-Even Analysis
- Importance
- Key Concepts and Terminology
- Calculating the Break-Even Point
- Break-Even Chart and Interpretation
- Applications
- Limitations
- Conclusion
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