Breakeven Analysis

A breakeven analysis is needed to manage almost any business because it provides an overview of how important variables influence profit or loss. Owners and managers are constantly faced with decisions about selling price and cost control. Unless they can make reasonably accurate predictions about the effect of price and cost changes, their decisions may yield undesirable or disastrous results. Common questions that business owners/managers ask are: Do we have to increase our price to be profitable? Can we discount our price and be more profitable? Can we afford to hire a new employee or subcontract out work? In addition, some long-term decisions such as purchasing equipment can be better made using break-even analysis. Break-even analysis is often a crucial part of preparing annual budgets to achieve profit goals. If we can assist you with this analysis please contact our office.