BUY WITH CONFIDENCE
DESCRIPTION
Do you know how much revenue you need to make in order to turn a profit? This may be difficult to understand if you've never thought about it and the financial equation is not super intuitive to build. The easiest way to think about it is in relation to personal income tax. You know if you make a certain amount of money / income, you will have to pay a certain percentage of that to taxes.
At some income level, you will just make enough to cover all your household expenses after taxes and save 0. This is the break even point. For businesses, the concept is similar. You want to know what what point does a single dollar earned result in profits above 0.
This is a break-even analysis that goes a bit deeper. You can use it for any period (monthly/yearly/quarterly) or what have you. The inputs are fixed expenses and variable expenses for a single defined period.
The formula takes that information and calculates the amount of top-line revenue that is required to cover all the fixed and variable costs that have been entered for the period.
Some extras:
• Profit Margin Target (enter a desired profit margin and based on fixed/variable costs the sales revenue required will populate in order to achieve the profit margin input).
• DCF Analysis (based on the assumptions tab and the revenue output of the profit margin analysis, this template will show a five year forecast that includes fixed/variable costs and profit margin based on how the assumptions define growth each year).
• A present value calculation is then done on that output.
• Terminal value based on a defined percentage of year 5 sales.
• Clean visualizations of this analysis Instructional video included in file.
Got a question about the product? Email us at support@flevy.com or ask the author directly by using the "Ask the Author a Question" form. If you cannot view the preview above this document description, go here to view the large preview instead.
Source: Best Practices in Break Even Analysis Excel: Break Even Analysis Template Excel (XLSX) Spreadsheet, Jason Varner | SmartHelping
OVERVIEW
ABOUT THE AUTHOR
Additional documents from author: 135
I graduated in 2011 with a Bachelors degree in Accounting. From there, I worked at a few small businesses doing financial reporting and some bookkeeping. After a few years of that, I started doing freelance financial consulting work on Elance and Upwork.
After over 400 jobs completed with a 100% success rate, I now run my own modeling/consulting practice and continue to build new financial models every few weeks.
[read more]
Ask the Author a Question
This document is available as part of the following discounted bundle(s):
Break Even Analysis Organizational Silos Consulting Frameworks Proposal Template Artificial Intelligence Robotic Process Automation Fourth Industrial Revolution Natural Language Processing Business Case Example Manufacturing Organizational Design
![]() |
Download our FREE Strategy & Transformation Framework Templates
Download our free compilation of 50+ Strategy & Transformation slides and templates. Frameworks include McKinsey 7-S Strategy Model, Balanced Scorecard, Disruptive Innovation, BCG Experience Curve, and many more. |