The Break Even Point is a crucial measurement for business and is often over looked.

Your Break Even Point is essentially:
 

1.    The point of zero profit and loss, i.e., where the revenue equals the costs; or
2.    The amount of money you are required to earn (your sales) that will cover all of your out goings.

Your Break Even Point can be calculated as follows:

Fixed Expenses / ((Revenue – Cost Of Goods Sold) / Revenue)

Revenue less Cost of Goods Sold will also calculate your Contribution Margin.  The total Contribution Margin will show how much a business has to contribute to its fixed costs.

If you would like to discuss further please contact us:
 McNamara and Co - Chartered Accountants, located minutes from the Melbourne CBD
 www.mcnamaraandcompany.com.au/contact-us
 Phone +61 3 9428 1062
 Email admin@mcnamaraandco.com

Please refer to disclaimer at the bottom of the page.