Breakeventarkastelu

Breakeventarkastelu, also known as break-even analysis, is a financial tool used to determine the point at which total cost equals total revenue, resulting in neither profit nor loss. This analysis is crucial for businesses to understand their financial stability and make informed decisions. The break-even point is calculated using the formula: Break-Even Point = Fixed Costs / (Selling Price per Unit - Variable Cost per Unit). Fixed costs are expenses that do not change with the level of production, such as rent and salaries, while variable costs vary directly with production, like raw materials. The selling price per unit is the amount a business charges for its product, and the variable cost per unit is the cost to produce each unit. Once the break-even point is determined, businesses can use this information to set prices, manage production, and plan for future growth. It is a fundamental concept in financial management and strategic planning.