Break-even point

Business financing Business planning

The break-even point (also known as critical turnover) is reached when the turnover is sufficient to cover the operating costs.

One popular method is as follows:

Gross profit margin = (gross profit / year turnover) x 100% = ____%

Break-even = (total cost / gross profit margin%) x 100 = $_______

Another formula you can use is:

Break-even = (fixed costs) / (selling price – variable costs)