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How do you calculate your Break Even Margin?
Break Even for a business is the point of zero profit and loss, i.e., where the revenue equals the costs.
Another way of thinking of your Break Even point is the amount of money you are required to earn to cover all your outgoings.
Break Even is calculated as fixed expenses divided by gross profit margin.
Fixed expenses are expenses that remain unchanged as your level of activity alters, i.e., changes in sales.
Gross profit margin is (revenue - COGS) / revenue
COGS - Costs of Goods Sold
If you would like to discuss further please contact us:
McNamara and Co - Chartered Accountants, located minutes from the Melbourne CBD
Phone +61 3 9428 1062
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