A break-even analysis is a business method to determine the point at which a company's revenues exactly cover its costs, resulting in neither profit nor loss. This point is referred to as the "break-even point." The analysis takes into account various cost factors, such as fixed and variable costs, as well as the selling price per unit.
Typical functions of software in the field of break-even analyses include:
Data Input: The software allows users to input relevant data, such as fixed costs, variable costs per unit, and selling price.
Graphical Representation: It provides graphical representations such as charts to visually depict the break-even point and other key metrics.
Scenario Analysis: The software enables users to simulate different scenarios by varying parameters like costs and selling prices to examine potential impacts on the break-even point.
Reporting: It generates reports and summaries that present the results of the break-even analysis clearly and comprehensively.
Sensitivity Analysis: This function allows users to examine the effects of changes in input parameters on the break-even point to better understand risks and opportunities.