What’s your breakeven point? This metric can be useful when budgeting, investing in new equipment, launching a new product or analyzing the effects of a cost reduction plan. It’s easy to calculate using information from the income statement: breakeven = fixed expenses / [1 – (variable expenses / sales)]. Fixed expenses remain relatively unchanged with changes in your sales; variable costs ebb and flow based on your sales volume. Contact us if you have questions or need help working through the calculations.
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