2 min read
Definition
The break-even point = fixed costs ÷ contribution per sale. It tells you the volume at which the business stops losing money and starts making it.
In plain terms
It is the sales target you must hit just to cover everything. Every sale beyond it is profit; every one short of it is a loss.
Why it matters for your company
Knowing break-even helps you price, plan, and judge whether a cost or loan is affordable — a loan repayment raises the point. Use the break-even with loan calculator.
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