Break-even point definition
What is the definition of "break-even point"?
The break-even point is the point at which the value earned is equal to the total cost. For a business, it's extremely important to know how much revenue is required to just pay for the operation for the period measured, like a month or year.
Break-even may be expresses in terms of accounting, profit and loss, or it may be expresses in terms of cash flow, which is when cash collected is equal to disbursements.
Understanding the break-even point for a business, product or other unit of business allows management to make better management decisions about pricing, marketing, sales, production and other business matters.
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