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Starting a business can be pricey. Breakeven analysis and cost-volume-profit analysis will help you understand when-and if-your business will start to recover those costs and begin making a profit. Understanding your breakeven point will help you to determine how much you need in revenue to keep your business going.

Accounting professors Jim and Kay Stice walk through the breakeven equation, and cover types of costs, contribution margin, breakeven point, and net income. They also explain what each term means, and the importance of each, and offer examples from popular real-world companies.

Want to learn more? Learn about three types of accounting-financial, managerial, and income tax-in their Accounting Fundamentals course.

Topics include:
Breaking down fixed and variable costs
Pricing a service to cover costs
Identifying high contribution margins
Calculating a company's breakeven point
Conducting breakeven analysis with breakeven equations
Computing target net income
Exploring sensitivity analysis

Level: Beginner
Length: 1h 23m
Released: March 1, 2016

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Tags: Breakeven, Analysis

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