Rytvae Consulting · Think Right · Invest Right
Break-even Calculator
Result
Chart
Show formula & working
Contribution = Price − Variable cost · P/V ratio = Contribution ÷ Price
Break-even units = Fixed costs ÷ Contribution per unit · Break-even sales = Fixed costs ÷ P/V ratio
Margin of safety = (Expected units − Break-even units) ÷ Expected units
Details
How this works
Every unit sold contributes its price less its variable cost towards fixed costs. Once enough units have been sold to cover fixed costs, each extra unit adds its contribution to profit.
The margin of safety shows how far sales can fall before the business starts losing money — lenders look at it when judging how robust a project is.
Frequently asked questions
Should interest be in fixed costs?
For a lender's view, yes — interest on term loans is a fixed cost. Some analyses show cash break-even separately, leaving out depreciation.
What if the business sells several products?
Use the weighted average price and variable cost for the sales mix, or work out each product separately.
Preparing a project report?
Cost of project, means of finance and repayment capacity are what lenders read first. Talk to Rytvae.