Breakeven Analysis


Also found in: Financial, Encyclopedia.
A method used to evaluate the cost-effectiveness of purchasing new equipment or ‘buying into’ a new technology
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Projected metrics and breakeven analysis are consistent with Fitch's cases at the time the expected ratings were assigned.
This is the classic breakeven analysis, in which you identify the fixed cost and divide it by the variable cost savings to determine the quantity necessary to recoup the fixed cost.
It could appear to make breakeven analysis unnecessary, for example, by assuming that competitors are marking up a certain product category by a particular percentage and still can be in business.
8) In 2008, the SSA revised its instructions to SSA claims representatives in an attempt to downplay the breakeven analysis, although the tool is still available for potential claimants who request it.
This is a request for proposals to conduct 1) a current and projected financial and market demand analysis for the number, type and duration of Lodging stays for the (viable) communities in Kingman County, Kansas, 2) a competitiveness analysis on what a new hotel facility must do to provide a unique alternative to the current lodging stock and be successful in Kingman County, 3) 5 year forecasted projections by way of a five year operating pro-forma, 4) 5 year breakeven analysis for each of the identified (viable) in the Kingman County, Kansas.
A breakeven analysis is an important tool when trying to determine when a benefit should be taken.
The Special Calculators Suite, which includes calculators such as the Auto Loan with Insurance Calculator and the Breakeven Analysis Calculator.
The training programme covers several areas including: clarifying the concept and importance of breakeven analysis, the analysis of the relationship between size, cost and profit, the role of breakeven analysis on short-term financial planning and the role of breakeven analysis in pricing decisions, as well as the basics of cost categorization according to their relationship to the size of the productive, service and marketing sector and cost analysis and its auditing.
Topics include breakeven analysis, capital expenditures analysis, DCF and IRR, etc.
The field is broken down into 20 specific areas such as value chain design and planning, benchmarks, risk identification and management, international trade, and breakeven analysis and decision making.
For Bob's Bicycles, our example company, we've chosen to create a detailed Contribution Margin Income Statement that will provide the information necessary to perform both an overall breakeven analysis and a detailed variance analysis (see Figure 1).
In order to perform effective breakeven analysis using the formulas illustrated above, you need to be able to identify all of your costs and assign them to fixed or variable "buckets.