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# Break-Even Analysis Template in Excel

### What is break-even Analysis:

Break-Even Analysis is used to check what number of units should be sold to fulfill all expenses of a business. We have used the Fixed and Variable (per unit) costs to do this analysis.

### What is the break-even point?

The break-even point of a business is where the overall cost (Fixed + Variable) is the same as the Revenue. The lower the break-even point, the upper the financial stability and solvency of the firm.

Break-even analysis is critical in business planning and company finance because assumptions about costs and potential sales determine if a corporation (or project) is on target for profitability.

### Break-Even Analysis Calculation:

To calculate the Break-Even Point, we need below things-

• Price Per Unit: the worth at which you’re going to sell the merchandise
• Variable Cost (per unit): Cost of products sold, packing, etc.
• Contribution Margin (per Unit): Price per unit – Variable Cost (per unit)
```Break-Even Point = fixed charge / Contribution Margin (per unit)

Break-Even Sale = Break-Even Point * Price Per Unit```