Home/Finance/Break-Even Analysis Calculator

Break-Even Analysis Calculator

Determine the exact sales volume and revenue required to reach business profitability and plan for target profit goals.

Financial Inputs

Per unit sold

Per unit sold

Margin of Safety

Your sales can drop by **66.7%** (333 units) before the business starts incurring a loss.

Operational Break-Even
167Units
Revenue Required: $7 500

Projected Profit

+$10 000

FOR 500 UNITS

Progress toward $2000 profit goal

Target Profit Analysis

Sales for Target234 units
Unit Margin$30.00
Fixed Cost Coverage100%

Business Strategy

Margin of Safety: Measures the cushioning between current sales and the level where you start losing money. Higher is safer.

Target Profit: Calculates the needed volume to not just break even, but reach a specific bottom-line dollar goal.

Profit Formula

Q = (Fixed Costs + Target Profit) / (Price - Variable Cost)

This tool is useful for Entrepreneurs, Small Business Owners, and Financial Analysts (and for everyone else who wants to identify the exact sales volume needed to reach profitability).

Related Calculators

Return on investment

Quantify your success. Calculate ROI, IRR, and NPV to determine the true profitability of your business projects or assets.

Debt Payoff Engine

Compare Snowball vs Avalanche methods to find your fastest path to zero debt.

Retirement & FIRE Planner

Calculate your financial independence target using the 4% rule and growth modeling.

SIP & DCA Calculator

Analyze compounding growth for Systematic Investment Plans and Dollar Cost Averaging.

Strategic Break-Even Analysis

The break-even point is the production level where total revenues equal total expenses. In other words, it is the point at which a business neither makes a profit nor suffers a loss. Understanding this threshold is critical for pricing strategy, financial planning, and risk management.

As outlined by the U.S. Small Business Administration (SBA), performing a break-even analysis helps entrepreneurs validate their business model before committing significant capital.

The Break-Even Formula

To calculate the break-even point (in units), the following formula is used:

Break-Even Units = Fixed Costs / (Price per Unit - Variable Cost per Unit)

Key Components

  • Fixed Costs: Expenses that do not change regardless of production volume (e.g., rent, insurance, salaries).
  • Variable Costs: Expenses that vary directly with production volume (e.g., raw materials, packaging, direct labor).
  • Contribution Margin: The difference between the Price per Unit and the Variable Cost per Unit. This is the amount available to cover fixed costs.

Why Use This Tool?

Our professional-grade calculator provides more than just a single number. Based on analytical standards from Investopedia, it includes Margin of Safety and Target Profit modeling.

Advanced Metrics

Margin of Safety

The difference between your actual or projected sales and the break-even point. It tells you how much sales can drop before the business starts losing money.

Target Profit Analysis

Determines the sales volume needed not just to break even, but to achieve a specific profit goal (e.g., "How many units must I sell to net $10,000 monthly?").

Business Best Practices

Successful businesses use break-even analysis to decide whether to launch a new product, change prices, or implement cost-cutting measures. If your break-even point is too high, you may need to increase your price or find ways to reduce your variable costs.