Business Performance Analysis
Help for the Business Performance Analysis Breakeven Module to calculate current breakeven points for revenue and the number of sales.
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Input Help Forecast Help Valuation Help Breakeven Help Price Help Chart Help Subscription Help
Overview
Help for the Business Performance Analysis Breakeven Module.
The Breakeven Module calculates current breakeven points using revenue, variable cost, fixed cost and number of sales data.
This Help file outlines the relationships and calculations applied for each item. The ? after an item links directly to the items Help.
Calculation formula are provided for reference and to enable an in-depth understanding of the underlying calculations applied in the forecast. Breakeven analysis can be completed without reference to the formula applied.
Instructions for Use
Breakeven Analysis applies your current performance input to determine breakeven points for Annual Revenue and Number of Sales. It applies the Annual Revenue, Total Variable, and Total Fixed values with the Breakeven Data values to calculate breakeven points.
To perform Breakeven Analysis values must be provided for Annual Revenue, Total Variable, and Total Fixed in the Input module. If you have undertaken a Forecast Analysis these vales will already be set. If you prefer to undertake a quick Breakeven Analysis without a forecast you can simply input an Annual Revenue value and set the Total Variable and Total Fixed values via the Other Variable and Other Fixed inputs with all other expenses set as 0.
Top Controls
These are Module specific Controls. They appear as click-able links below the Analysis Menu.
Print
This Control prints the current window.
You can also use the browsers Print and Print Preview functions to set print variables. To do this from your browser tool bar go File, Print or File, Print Preview.
Plot Breakeven
This Control plots the Breakeven Analysis on the Chart module. It shows Annual Revenue and Total Expenses by Number of Sales. The Breakeven point is where Revenue and Expenses cross. Below this point the business surplus is negative (loss) and above this point the business surplus is positive (profit). The amount of surplus is the difference between the Annual Revenue and Total Expenses.
Annual Revenue
This is the current Annual Revenue input value from the Input module.
Average Sale Price
This is the current Average Sale Price input value from the Input module.
Number of Sales
This is the current Number of Sales calculated value from the Input module.
Number of Sales = Annual Revenue / Average Sale Price
Total Variable
This is the current Total Variable expenses calculated value from the Input module. It is the sum of the variable expenses.
Total Fixed
This is the current Total Fixed expenses calculated value from the Input module. It is the sum of the fixed expenses.
Profit/Surplus
This is the current Profit/Surplus calculated value from the Input module. It is the revenue less total expenses.
Profit/Surplus = Annual Revenue - (Total Variable + Total Fixed)
Breakeven Revenue
This is the current revenue required for the business to breakeven.
Breakeven Revenue = Total Fixed / ( 1 - (( Total Variable / Number of Sales ) / Average Sale Price ))
this is equivalent to
Breakeven Revenue = Total Fixed / ( 1 - ( Variable Expense per Sale / Average Sale Price ))
Revenue less than breakeven revenue results in a loss. Revenue greater than breakeven revenue results in a profit.
Breakeven Number of Sales
This is the current number of sales required for the business to breakeven.
Breakeven Number of Sales = Breakeven Revenue / Average Sale Price
Less than the breakeven number of sales results in a loss. Greater than breakeven number of sales results in a profit.
Input Help Forecast Help Valuation Help Breakeven Help Price Help Chart Help Subscription Help
