Break-Even Point Analysis
Break-even point: The point where revenues equal expenses and profit is zero.
Break-even point analysis: A method that calculates the amount that revenues exceed the break-even point.
The break-even point is the point where revenues equal expenses and profit is zero. "Break-even analysis calculates what is known as a margin of safety, the amount that revenues exceed the break-even point. This is the amount that revenues can fall while still staying above the break-even point" (Break-Even Analysis, 2012).
Break-Even Analysis. (2012). Investopedia. Retrieved on October 12, 2012, from www.investopedia.com/...
