How to Calculate Break-Even Analysis
Introduction
A break-even analysis helps businesses determine when they will start making a profit. Here’s a guide to calculating break-even analysis using Boulder Invoice, designed to help small businesses plan for profitability.
Steps to Calculate Break-Even Analysis
Identify Fixed Costs: List all fixed costs, such as rent and salaries.
Identify Variable Costs: List all variable costs, such as materials and labor.
Determine Sales Price: Establish the average sales price per unit.
Calculate Break-Even Point: Use the formula: Break-Even Point = Fixed Costs / (Sales Price per Unit - Variable Cost per Unit). Boulder Invoice’s tools can help automate this calculation.
Analyze Results: Use the break-even analysis to set sales targets and make informed business decisions.
Conclusion
Calculating break-even analysis is essential for understanding when your business will start making a profit. Boulder Invoice offers affordable tools to help you perform break-even analysis accurately and efficiently. Try Boulder Invoice today to streamline your financial planning.
