Break Even Point Formula

How to Calculate Break Even Point

A business is said to break even when it’s profit is zero. It is useful to be able to calculate the sales needed for a business to break even, and to do this the Break Even Point Formula is used.

The Break Even Point Formula

Break Even Point = Fixed Costs / Gross Margin Percentage

For further information on the Break Even Point Formula see the Wikipedia definition.

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Last modified March 23rd, 2016 by Michael Brown

About the Author

Chartered accountant Michael Brown is the founder and CEO of Double Entry Bookkeeping. He has worked as an accountant and consultant for more than 25 years in all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a BSc from Loughborough University.

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