[title title=”Break-even analysis” heading=”5″]

The starting point of a break-even analysis is the following question: How many products/services have to be produced and sold to cover the fixed costs? The break-even analysis is a key tool for business planning. It helps to analyze the impact of the cost structure and determine the product price and sales volume.

Other ways to assess project profitability is an analysis over time (Pay Back Period) or project rate of return considerations [ NPV (Net Present Value) or IRR (Internal Rate of Return)]. Also see investment calculations.

Detailed break-even analysis or another form of profitability analysis belongs to every business plan.