February 23, 2014

Breakeven Analysis Using Excel

Breakeven analysis in Excel using Goal-seek

What is breakeven analysis? Breakeven analysis in Excel using the variables like contribution margin, fixed costs and variable cost is quick and easy. However, it is even easier to use Goalseek to perform the breakeven analysis. A company is supposed to break even when the total expenses equals the total revenues. It can also be defined as the point where the net profit is zero, i. e. the company has neither made any profits nor incurred any loss.
Another way to look at the break-even point is that it is the point at which your product stops costing you money to produce and sell, and starts to generate a profit for your company.
The Excel training video compares the earlier extensive analysis of the breakeven point using standard procedures and the goal-seek method.

Further reading:
How to Do a Breakeven Analysis