It is considered more convenient and visual, so many entrepreneurs are used to working with it. The horizontal axis shows the volume of products sold in physical terms. The vertical axis shows all business expenses in monetary terms and revenue. The graph may look like this: There are several features of constructing such graphs.
Let’s consider how to visualize the breakeven point
To calculate the break-even point, it is necessary to construct a line of fixed costs. It is parallel to the X-axis and is not derived from the zero coordinate. In the norway phone number library picture, it is a red line that comes out of the value “1000”. This means that all fixed costs of the company are equal to 1000 conventional units. Therefore, if the business cannot sell a single product, the company will still bear some of the costs.
This is the payment of fixed costs
Next, variable costs are identified. This is a straight line that starts from the zero coordinate and goes up. In the picture, this is the orange line. 3) After this, we construct a line of total costs. This is the sum of all fixed and variable costs. and moves parallel to variable costs. In our example, this is the purple line. 4) At the end, we draw a line that corresponds to the revenue for the reporting period.
In our example, this is the green line
Which, like variable costs, comes out of the zero coordinate. The break-even point is the intersection of the total cost and revenue lines. Everything to the what is internal and external SEO ? left and below the point is the company’s losses. Everything to the right and above is profit. It turns out that at this very point, profit will be zero. How the break-even point is calculated and used in practice At the beginning of the article, we mentioned in general terms what the breakeven point is for and what it shows.
What to do after we have managed to find
The breakeven point. Estimate on what day of the tg data month the company. Reaches the breakeven point If the company reaches the break-even point in the middle of the month, this is a good indicator. If later, then this is a risk for the business. In the case of long downtimes and force majeure circumstances, you will not have a reserve of time to recoup all the invested funds. In the example, the company reached the breakeven point late.