Break-Even Analysis: How to Calculate the Break-Even Point


You can also speed up your loan repayment to a bi-weekly cadence, which many lenders allow. Bi-weekly payments equate to one extra payment each year and 51 fewer months bench accounting @benchaccounting on a 30-year loan. Monitor refinance rates regularly and use Zillow’s free refinance calculator to make sure a refinance is worth it for your financial circumstances.

  1. A break-even calculator is a tool used to determine the point at which a business’s total revenue and total costs are equal.
  2. Businesses should consider factors such as market demand, competition, pricing dynamics, and sales forecasting accuracy when interpreting break-even point results.
  3. Generally, to calculate the breakeven point in business, fixed costs are divided by the gross profit margin.

How to use break even calculations

Closing fees vary depending on your location, loan type, loan size and mortgage lender. Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues. For any new business, this is an important calculation in your business plan.

Put Option Breakeven Point Example

The hard part of running a business is when customer sales or product demand remains the same while the price of variable costs increases, such as the price of raw materials. When that happens, the break-even point also goes up because of the additional expense. Aside from production costs, other costs that may increase include rent for a warehouse, increases in salaries for employees, or higher utility rates. The formula for calculating the break-even point (BEP) involves taking the total fixed costs and dividing the amount by the contribution margin per unit. If you have fixed costs that do not incur monthly you should still include them, but calculate the monthly amount that goes towards that expense.

What is Break-Even Analysis?

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