45 Break Even Analysis Example & Template

Break Even Analysis Template – A business, of course, requires a count. Calculations of capital, production, and also cost are of course required. Therefore, you need to understand about how to analyse this. So indeed, in that business you cannot use Analysis carelessly. Everything has its own designation.

The analysis used for this business is a measuring tool to see the products being marketed. So, starting from the plan, the stock, until the items sold have an analysis. The formulas in this analysis will make it easier for you to be able to determine the price according to the product.

So, break even analysis is generally used to find out how many sales targets that must be achieved. This will later find out whether the income can cover the capital or not. So, from that here you will count the years when this formula is used in the business process you do.

Break Even Analysis

Break Even Analysis Template

Break Even Analysis Example

Look for breakeven in what you need to know. If this is not sought and predicted, then it is certain that you cannot carry out a sales plan or strategy. In addition, by not having a record of break-even value, you will not know the actual target income. Having a target income is important, because in the income business it is necessary to turn back for other needs.

Therefore, here it is important to know the break even analysis. So, the function is to find out how much income should be achieved to break even. So, it is impossible that the income is the same as the initial capital. Because if it is the same as the initial capital, the break-even value is still lacking. If you are still confused, see the explanation below.

Break Even Analysis in Payback Period

The term payback period in this break-even is a standard. So, when you invest, there must be a loss, profit, or break-even. This payback period is a calculation of how you break even. Like you made a 5 $ investment, how long will it take to get the 5 $ back.

Here, of course, you cannot immediately set the time. You need to look at the state of the market. Seeing the condition or environment you invest in. By using break even analysis here you can break even within one month, one year, 5 years, or another.

So, in that payback period you can determine when the break-even will be fulfilled. Here you need to understand about the daily to yearly requirements that must be there. Because the payback period is no longer a production count. So of course, the income to be able to break even must be much greater than capital.

Income that is much higher than this capital will prove that you can break even. So, from this break even analysis regulates things like that related to the prediction of rough counts. The events in practice are often different, but you already have a record or estimate regarding the break-even calculation.

Selling Price

The selling price here, of course, you can determine starting from the cost of making goods or other accommodation costs. Then make the item or something worthy of the price you want. So, don’t get overrated or underrated. There are several aspects to being able to measure what a fair selling price is.

This needs to be ensured because sometimes during the sale there is a change in price. Therefore, here you need to estimate the right price for the buyer. This will also determine your profit later when the price goes down or up. So, this selling price determination needs to be calculated also by using break even analysis.

Variable Costs

Variable costs are costs that cover all the needs in a business. In other words, that variable cost is the use of capital as a whole. So here the coverage starts from shopping for raw goods, production costs, to the money to fee for the freelancers into variable costs.

Break even analysis will calculate how much variable cost you have spent with your profits. So indeed, to break even is not as easy as you spend capital and get a profit. There are many costs that need to be used again when there is from income. Therefore, to calculate break-even, you cannot just take it from income.

Fixed Cost

This fixed cost is all the prices that must be in every day, week, month, and year. However, it is true that the budget that goes into fixed costs is something whose value will remain the same. So, the cost here doesn’t look at production, sales, or market conditions. So, this fee is really an obligation that must be carried out in the same amount.

Please note that the fixed costs here are subject to change. The change is bound to be more expensive. Because, in fact, the categories in fixed costs are not goods or something whose price can fluctuate according to economic conditions or issues. Therefore, this section is called the fixed cost, which you cannot avoid or expect to decrease in value when count break even analysis.

Break Even Analysis Formula

Break Even Analysis Calculator

An example of fixed cost is employee salary. If there is a freelancer fee above, it will be the employee’s salary here. Then there is the cost of renting the place and its supporters, such as water, electricity, and maintenance money. After that, there is something that is last but not to be forgotten, namely taxes. Tax is very important and should not be missed.

Conclusion

So, basically, when you master break even analysis, this can be a reference for running a business. So, the business that is being carried out by you, of course, will not go off track. Even though bankruptcy is certain of the unexpected. So, the cause of the bankruptcy was not from money management or income.

With break even analysis, you will know more about profit, loss, or break-even. Please note that a large income does not necessarily break even. Therefore, you need to calculate everything to find out how much income you need from the capital so that you can break even.