Determine breakeven point of investment

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Speccon Training Academy

Are you just like Farmer Jo? You got no clue about the break even point?
Well then, Investment Banker John Parker from Goldman SWAGs can help you out definitely! ;)

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VAHKNeumi

Clicked here http://www.MBAbullshit.com/ and OMG wow! I'm SHOCKED how easy..
For instance you are an advertising executive and just after initiating your unique commercial, the sales of your cola drink jumps to $1 million dollars. Is that a decent outcome? Yes?
In fact, you definitely don't know! What are the reasons? What if you exhausted $1 million dollars in advertising costs and also the ingredients and container of this cola soda also cost $1 million dollars, to find a total of $2 million? You will have earned $1 million dollars, but will have invested $2 million dollars on advertising in addition to "cost of goods." Furthermore, one would still seek to join the expenses of the business enterprise like rent, salaries, etc.
Therefore, what quantity should your advertising grow sales before we are able to assume that the excess sales you observed from advertising is sufficient to at any rate pay for your complete costs and expenses? Maybe $2 million? $3 million? What quantity exactly?
This is actually the principle of "Break Even." A corporation break even point is the precise amount of sales that you need in which the money may possibly be merely enough to pay for your costs and expenses. Whereas, a task's (ex. An advertisement's) break even point is exactly where the rise in sales added by way of the new undertaking is ample to fund the additional costs and expenses brought by that new scheme. Recognize that achieving break even does not mean you are receiving a profit though either; like I reported previously, it only means you find yourself making enough to pay for your costs and expenses. http://www.youtube.com/watch?v=ar7mVYY-AO0
Accordingly, so as to produce a profit, you'd need to 1) produce more sales so that you will go beyond the break even point, and/or 2) improve your merchandise's "contribution margin." Precisely what is contribution margin? It happens to be the difference between the price that you intend to deal in your merchandise and your "variable costs." Variable costs are costs which aren't "fixed" (fixed costs are things like fixed rent and flat compensations which may not climb regardless of whether you generate and/or sell more products or services). For this reason, contribution margin is different from "profit" for the reason that once we compute profit, we integrate fixed costs and overhead.
http://mbabullshit.com/blog/cost-volume-profit-analysis-break-even-analysis/
Cost Volume Profit Analysis, on the other hand, is definitely parallel to but bigger than Break Even Analysis, as it carries going more than just figuring out how much to sell with the intention to cover costs and expenses. With cost volume profit analysis, we likewise try to resolve how much we might sell if we want to reach a certain target profit, in which we take into account taxes as well.
breakeven, break even analysis, cost volume profit analysis, what is break even analysis

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MBAbullshitDotCom

Break even analysis are related to profit analysis of organization.

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Krishna Verma

When you are considering an investment or launching a new product you want to know at what point you will "break even." The Goal Seek tool in Excel is perfect for this scenario. In this case we want the resulting value in our formula to return "0" - our break even point.
Watch how I create multiple scenaios with Goal Skke to help me to set the proper selling price and cost structure.
I invite you to visit my website - www.thecompanyrocks.com - to view all of my videos and resources including "The 50 Best Tips for Excel 2007 DVD.
Danny Rocks

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Danny Rocks

2 minute explanation videos deliver a simplistic overview of complex business, accounting, and finance topics with the intent to provide the viewer with a better understanding of the topic.
For other 2 Minute Explanation videos see a partial listing of videos below:
LIFO: https://www.youtube.com/watch?v=t4EP783c9iQ
Balance Sheet: https://www.youtube.com/watch?v=WR_W4VnksfQ
Income Statement: https://www.youtube.com/watch?v=-x3i13vWWFE
Statement Of Cash Flows: https://www.youtube.com/watch?v=MeAIqTRkkng
Ponzi Scheme: https://www.youtube.com/watch?v=u660xNqdysU
Stock Market: https://www.youtube.com/watch?v=Zo0m7nGWMAU
Stock Option: https://www.youtube.com/watch?v=mTwrIW8JtxQ
Compounding Interest: https://www.youtube.com/watch?v=U1cPcLkOoXA
Money Laundering: https://www.youtube.com/watch?v=md-y7DDRsAM
Earnings Per Share: https://www.youtube.com/watch?v=yMA2bdEqx4g

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Instructor S

In this revision video, Jim Riley from tutor2u explains the concept of contribution and how it can be used to calculate the breakeven output.

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tutor2u

The important concept of the Margin of Safety is explained in this revision video on breakeven analysis.

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tutor2u

break even Point formula Analysis
The break-even analysis lets you determine what you need to sell, monthly or annually, to cover your costs of doing business—your break-even point.
Understanding break-even analysis
The break-even analysis is not our favorite analysis because:
It is frequently mistaken for the payback period, the time it takes to recover an investment. There are variations on break even that make some people think we have it wrong. The one we do use is the most common, the most universally accepted, but not the only one possible.
It depends on the concept of fixed costs, a hard idea to swallow. Technically, a break-even analysis defines fixed costs as those costs that would continue even if you went broke. Instead, you may want to use your regular running fixed costs, including payroll and normal expenses. This will give you a better insight on financial realities. We call that “burn rate” these post-Internet days.
It depends on averaging your per-unit variable cost and per-unit revenue over the whole business.
However, whether we like it or not, this table is a mainstay of financial analysis. You may choose to leave it out, but really, a business plan would not be complete without it. And, although there are some other ways to do a break-even analysis, this is the most standard.
break even point definition
Reference: https://getmeaplus.com/
What is a break even in business?
Let me explain break-even point concept with the help of very simple problem,
For Example,
Let a company have $30,000 Fixed Cost, Variable cost per unit 6 and sale price per unit $10.
break even point formula
First, we will find our relevant data from this question. For the calculation of break-even point in the sale, we will need fixed cost, Variable cost per unit and sale price per unit.
break even point accounting?
Now we will find contribution margin ratio. We know that contribution margin ratio is equal to sale less variable cost divided by sale.
break even point calculation
In our question, contribution margin ratio is 40%. Now we will put our data in a break-even point in sale formula. You have noted one point, the desired profit is not mentioned in this question. So, we will put zero for desired profit.
break even point example,
break even point in sales
First, we will find contribution margin ratio. For contribution margin ratio, we will subtract $10 sale price from $6 variable cost and divided by $10 sale price per unit and get 40% contribution margin.
Contribution Margin ratio = ($10-$6)/$10 = 0.40 or 40%
Break-Even Point sale= [$30,000+$0]/ 40% = $75,000
break even point in dollars
Now we will divide $30,000 fixed cost to 40% contribution margin ratio. We will get $75,000 break-even sales.
What is the break even point?
Now an important point you must note at that time. If we will divide $75000 break-even sales to $10 sale price per unit. We will get 7500 break even units.
Now I am going to explain Break-even in unit concepts.
Here, we need contribution margin in the unit. For contribution margin in units, we will subtract $10 sale price from $6 variable cost and get $4 contribution margin.
If we divide $30,000 fixed cost to $4 contribution margin. We get 7500 break-even units.
Once again, you must note important point here again. If we will multiply break-even units with the unit sale price. Then we will easily calculate break even in sales.
Break-Even point (BEP) Assumptions
1. Sale price remains constant.
2. Cost can be perfectly divided into variable and fixed elements.
3. Sale mix remains constant in case of multiple products.
4. Number of units produce = Number of units sold.

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Accountingplus

Lean Finance _ Operating Leverage session, by Phil Greenwood, UWisc-Madison school of business.

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Philip Greenwood

For Economics
www.saseassociates.com
How to calculate break even. An animated presentation of the concept of Break-Even analysis followed by an example of calculating the Break-Even Point for a small business with linear Total Revenue and Total Cost.
For more information, contact Dr. John F Sase at http://saseconomics.com/contact.html
The economic "break-even level or break-even point (BEP) represents the sales amount—in either unit or revenue terms—that is required to cover total costs (both fixed and variable). Profit at break-even is zero. Break-even is only possible if a firm's prices are higher than its variable costs per unit. If so, then each unit of the product sold will generate some 'contribution' toward covering fixed costs....In economics & business, specifically cost accounting, the break-even point (BEP) is the point at which cost or expenses and revenue are equal: there is no net loss or gain, and one has 'broken even.' A profit or a loss has not been made, although opportunity costs have been 'paid,' and capital has received the risk-adjusted, expected return. In short, all costs that needs to be paid are paid by the firm but the profit is equal to 0....The purpose of break-even analysis is to provide a rough indicator of the earnings impact of a marketing activity.
The break-even point is one of the simplest yet least used analytic tools in management. It helps to provide a dynamic view of the relationships between sales, costs, and profits. For example, expressing break-even sales as a percentage of actual sales can give managers a chance to understand when to expect to break even (by linking the percent to when in the week/month this percent of sales might occur). The break-even point is a special case of Target Income Sales, where Target Income is 0 (breaking even). This is very important for financial analysis." -- see Wikipedia: Break-even (economics).

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plumstreetmusic

In this A level Business revision video, we examine the break even formula, explaining how to calculate a business's break even level of output. This is one of the most frequently examined topics on the A level syllabus.
A level Business Studies Revision from TakingTheBiz.
See more of our videos: http://www.youtube.com/c/TakingTheBiz

Views: 16089
TakingTheBiz

Download file: http://people.highline.edu/mgirvin/excelisfun.htm
See how to do Break Even Analysis Table with Formulas, Chart (X-y Scatter Chart Diagram), and Conditional Formatting with a Logical Formula (True False Formula) and Mixed Cell References. Also See a Formula and charting trick to show the approximate Break Even Point on the Chart. Accounting Break Even Analysis Excel. Managerial Accounting Cost Accounting Fixed Cost Variable Cost Accounting Contribution Margin Accounting Class Break Even Analysis X Y Scatter Diagram Chart Line Chart Finance Break Even.

Views: 242779
ExcelIsFun

Our Excel training videos on YouTube cover formulas, functions and VBA. Useful for beginners as well as advanced learners. New upload every Thursday.
For details you can visit our website:
http://www.familycomputerclub.com
Breakeven analysis in Excel using the variables like contribution margin, fixed costs and variable cost is quick and easy.
A company is supposed to break even when the total expenses equals the total revenues. It can also be defined as the point where the net profit is zero, i. e. the company has neither made any profits nor incurred any loss.
We have also calculated the breakeven point using: break even point = fixed cost / contribution margin per unit.
A picture is worth a thousand words. We have created a line chart to show how you can visualize the breakeven point by plotting the sales unit per period and the net profit.
Get the book Excel 2016 Power Programming with VBA: http://amzn.to/2kDP35V
If you are from India you can get this book here: http://amzn.to/2jzJGqU

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Dinesh Kumar Takyar

In this video, we discuss margin of safety, break even point, contribution margin and operating income. Margin of safety is much easier than the textbooks will lead you to believe! For more help with accounting, please visit my website http://AccountingInFocus.com.

Views: 5133
Kristin Ingram

“Breakeven Analysis” by Somesh Banerji, Assistant Professor ,Logistics & Operations at Durgadevi Saraf Institute of Management Studies. This session covers the significance of Breakeven Analysis in Project Management.
Shot at the Deviprasad Goenka Management College of Media Studies using AB-Live virtual studio technology.

Views: 439
DSIMS

Check out my Blog:
http://exceltraining101.blogspot.com
This video show how to create a break even chart. Based on fixed and variable costs you can calculate the break even unit totals and dollar amounts with the per unit sales price.
P.S. Feel free to provide a comment or share it with a friend!
#exceltips
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Excel Training:
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Excel Books:
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Doug H

Calculating break-even point in units and dollars, and also sales needed to achieve a desired target profit.

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danthehokie

एक्सेल हिंदी Do Break Even Analysis in Excel in Hindi to find out when you will be able to reach a no profit no loss situation. Break-even analysis is the study of what amount of sales, or units sold, is required to break even after incorporating all fixed and variable costs of running the operations of the business. Break-even analysis is critical in business planning and corporate finance, because assumptions about costs and potential sales determine if a company (or project) is on track to profitability.
The break even point is very important to find business viability.
Break-even analyses help business owners determine when they'll begin to turn a profit and helps them price their products with that in mind. It provides a dynamic overview of the relationships among revenues, costs and profits.
However, typical variable and fixed costs differ widely among industries. This is why comparison of break-even points is generally most meaningful among companies within the same industry, and the definition of a "high" or "low" break-even point should be made within this context.
The basic idea behind doing a break-even analysis is to calculate the point at which revenues begin to exceed costs. To do this, one must first separate a company's costs into those that are variable and those that are fixed. Fixed costs are costs that do not change with the quantity of output and they are not zero when production is zero. Examples of fixed cost include rent, insurance premiums or loan payments. Variable costs are costs that change with the quantity of output. They are are zero when production is zero. Examples of common variable costs include labor directly involved in a company's manufacturing process and raw materials.
What is a Break-Even Analysis?
A break-even analysis is a useful tool for determining at what point your company, or a new product or service, will be profitable. Said another way, it’s a financial calculation used to determine the number of products or services you need to sell to at least cover your costs. When you’ve broken even, you are neither losing money nor making money, but all your costs have been covered.
The Calculation
The equation used to perform a break-even analysis is:
Fixed costs/Price of product – Variable costs per unit
Your fixed costs are the administrative expenses you incur by starting your business or developing a new product. Fixed costs are the same no matter how much you sell. They include things like:
Rent
Utilities
Salaries
Interest paid on debt
Variable costs are expenses that increase with the production of products or services and include things like:
Raw materials
Distribution costs
Packaging
A break-even analysis is frequently used to assess the viability of a new business idea.
Performing a break-even calculation can give you a general sense of whether the idea is worth pursuing. If your analysis suggests that you would have to sell 8,000 bottles of wine before you’d make a profit, and it will require an investment of $20,000 to get going, you can make a more informed decision regarding whether that’s how you want to invest your resources.
Financial Analysis Series Videos
1 - Revenue Analysis in Excel with Dashboard
https://www.youtube.com/watch?v=Pm1JclraX3I
** Useful Excel formulas and Functions **
10 Most Used Formulas MS Excel
https://www.youtube.com/watch?v=KyMj8HEBNAk
Learn Basic Excel Skills For Beginners || Part 1
https://www.youtube.com/watch?v=3kNEv3s8TuA
10 Most Used Excel Formula
https://www.youtube.com/watch?v=2t3FDi98GBk
**Most Imporant Excel Formuls Tutorials**
Learn Vlookup Formula For Beginners in Excel
https://www.youtube.com/watch?v=vomClevScJQ
5 Excel Questions Asked in Job Interviews
https://www.youtube.com/watch?v=7Iwx4AMdij8
Create Speedometer Chart In Excel
https://www.youtube.com/watch?v=f6c93-fQlCs
Learn the Basic of Excel for Beginners || Part 2
https://www.youtube.com/watch?v=qeMSV9T1PoI
Create Pareto Chart In Excel
https://www.youtube.com/watch?v=2UdajrDMjRE
How to Create Dashboard in Excel
https://www.youtube.com/watch?v=RM8T1eYBjQY
Excel Interview Questions & Answers
https://www.youtube.com/watch?v=Zjv1If63nGU
To watch more videos and download the files visit http://www.myelesson.org
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My E-Lesson

SOLAR PANELS ARE NOT WORTH IT FROM A PURELY MONETARY PERSPECTIVE (DEPENDING ON YOUR CIRCUMSTANCES)
This is mainly because of the fact that the initial investment you placed in the solar panel installation could had been invested in the stock market (or other investment vehicle). This is what's called "opportunity cost."
You can't simply look at the break even point of solar panels, but you have to look at the break even point versus investing in the stock market. Unfortunately, they never meet.
The cost benefit analysis clearly shows that the gap between payback period is HUGE, even if you want to consider in minor other variables.
For example, an initial investment for $20,000.00 in solar panel with a 9 year break even point and 7% average return (post-tax) would result in cash value displayed below. At the 9 year break even point for the solar panels, your stock investment would be valued at $36,769.18. The spread between solar panels and your stock values only grows exponentially larger from there.
Other disadvantages to consider compared to other investment vehicles (like stocks):
- When you sell your house, you may not recover the value of your initial solar panel investment while stocks are completely mobile.
- At the end of life of your solar power investment, your solar panels are worth essentially $0 and depreciate, whereas your stock investment continues to have compound interest.
You can click this link to see the spreadsheet I used to make the calculations here:
https://docs.google.com/spreadsheet/ccc?key=0Ar8ivt6iydY7dFYyWDM0QlNRb1d4Z2c1eHoyQXAwV2c&usp=sharing
Now if you want to argue all the extra "green" benefits items, I guess that's your prerogative. From a strictly monetary "return on your investment" perspective, the data greatly favors alternative investment options.
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http://jeffersonkim.com/2013/09/05/are-solar-panels-worth-the-cost/

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Jefferson Kim

Launching a business can be exhilarating and terrifying. In the early days of getting your company off the ground, there is a period of time before you will see any return on investment that can be stressful for many stakeholders.
However, having the foresight to know when you are in the clear can help to relieve this feeling. This is known as calculating a company’s Break-Even Point.
Interested in learning about how to run your own business? Or maybe it’s time to upgrade your resume with an MBA? Check out Ducere Global Business School, one of the most flexible, globally aware and industry relevant tertiary education providers in the world.
Start your journey now: http://bit.ly/ducereeducation
Ducere Design Team:
Sam Ross, Angus Turner, Dylan Bennett

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Ducere Global Business School

This short revision video introduces and illustrates the concept of sensitivity analysis.
Sensitivity analysis is a technique which allows the analysis of changes in assumptions used in forecasts. As such, it is a very useful technique for use in investment appraisal, sales and profit forecasting and lots of other quantitative aspects of business management.

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tutor2u

Capital Structure - EBIT/EPS Analysis https://www.youtube.com/watch?v=fdwZ9Iej3H0
Capital Structure - Operating Leverage http://www.youtube.com/watch?v=fdwZ9Iej3H0
More videos at http://facpub.stjohns.edu/~moyr/videoonyoutube.htm

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Ronald Moy

This is the first class in a short course on engineering Economics. It introduces some terms like Fixed costs, variable costs, and the breakeven point. I hope to have about 20-30 videos in this course for engineering students and those interested in economics.
I made two books for engineering students. One a structural analysis book with over 50 example problems and the other a primer for engineering economics.
Links to the Kindle versions and the printed versions are given below below. I have also given a free download link to my first children's book about bridge building robots who construct a prestressed concrete beam bridge. (Is too good!)
Kindle Versions
Structural Analysis Example Problems
https://goo.gl/MGwNKQ
Engineering Economics - Second Edition
https://goo.gl/8EADal
Real Book Versions
Structural Analysis Example Problems
https://goo.gl/FK94HG
Engineering Economics - Second Edition
https://goo.gl/A8LrnA
Free Children's Book
NieKo the Bridge Building Robot
https://goo.gl/WCmrxW

Views: 1525
Tall Bridgeguy

This video discusses Break Even Analysis and what it means to organizations.

Views: 175804
ilearnthisway

To download Brads Free Financial Mastery Cheat Sheet, click this link https://goo.gl/wBdHjW

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Brad Flynn

www.dealereprocess.com - It seems nearly every expert, consultant, and vendor wants to emphasize ROI and put their own spin on it. Consider using break-even analysis as a superior method for making financial decisions with less than perfect information.

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Dealer eProcess

Budget
A statement for a defined period of time which may include planned revenues, expenses, assets, liabilities & cash flows.
• Variance Analysis - is a process of comparing actual performance with a budget in order to determine how well the company or manager has performed.
1. Favourable variance - actual performance is better than the budgeted
2. Adverse variance - actual performance is worse than the budgeted
Cost Classification -
Price a product to cover the cost & make profit in long term.
1. Variable Cost
The cost increase or decrease in proportion to the level of production
2. Fixed Cost
The cost remains constant compared to the level of production
3. Semi-fixed/variable costs
The costs have fixed & variable elements. I.e. Telephone & electricity expenses
4. Direct costs (Variable Costs)
This can be directly related to a single product i.e. cost of material or labour
5. Indirect costs [or overheads] (Fixed or Variable)
This cannot be directly related to a single production.
• Full Absorption Costing;
All production cost including fixed & variable will be charged to obtain a full absorption cost for a product. A profit margin is then added…
1. Total Variable Costs
• Direct materials
• Direct labour
• Variable production overhead
PLUS
2. Fixed Overheads
• Factory rent
• Admin Expenses
• R & D Costs
Equals
3. Total cost
PLUS
4. Profit Margin %
Equals
4. Total Selling price
• Marginal Costing (Variable Costs)
Variable costs only are considered. A contribution margin is then added to this.
1. Total Variable Costs
• Direct materials
• Direct labour
• Variable production overhead
PLUS
2. Contribution Margin %
Equals
3. Total Selling price
• Break even analysis;
1. Unit Break Even Point
= Total Fixed Costs / (Unit selling price - Unit variable costs)
2. Sales Revenue (£) Break Even Point
= Total Fixed Costs / Contribution to sales ratio
3. Contribution to sales ratio
= Contribution per unit / Sales revenue per unit
4. Unit Margin of Safety
= (Budgeted sales - Break even point) / Budgeted Sales
5. Revenue (£) Margin of safety
= (Budgeted sales revenue (£) - Break even point) / Budgeted sales revenue
• Investment Appraisal Techniques
Techniques are used to make better decisions
1. Accounting Rate of Return [Return On Investment - ROI] - ARR
ARR (%) = Avg Annual Profit / Initial Investment to earn that profit x 100%
Or
ARR (%) = Avg Annual Profit / Avg Investment to earn that profit x 100%
2. Payback period (PP)
This is the length of time it takes for the initial investment to be repaid out of the net cash flows.
3. Net Present Value [NPV]
• This is the net of the present value of the cash inflows from a project less the present value of the cash outflows from a project.
• Based on time value of money
• Project is accepted if NPV is positive.
4. Internal Rate of Return (IRR)
• IRR is the discount rate, which when applied to future cash flow of a project produces a NPV of zero.
• IRR can be found by trial & error or estimated by using a method called interpolation.
• Project is accepted if IRR exceeds to interest rate.
Financing a Business
• Major Source of Internal Funds
1. Long term - Retained earnings, Sale of non-current assets, Loans from directors
2. Short term - Tighter credit controls, Delaying payment, Reducing inventory, Personal loans
• Major Source of External Funds
1. Long term - Ordinary and/or preference shares, Long term bank loan, Bonds, Government loans/grants, Pension fund
2. Short term - Overdraft, Invoice discounting, Debt factoring, Short term loans

Views: 411
VMB

This lecture describes the importance of break even analysis and selection of manufacturing processes (or set of combination of processes).

Views: 4600
Fundamentals of manufacturing processes

In order to get money back on an investment to break even, the investor has to be honest with himself about how long he is willing to ride out a negative factor on an investment. Learn about the risks involved in investing with help from a registered financial consultant in this free video on analyzing investments.
Expert: Patrick Munro
Contact: www.northstarnavigator.com
Bio: Patrick Munro is a registered financial consultant (RFC) with outstanding sales volume of progressive financial products and solutions to the senior and boomer marketplace.
Filmmaker: Reel Media LLC

Views: 872
eHow

Use this break even worksheet to quickly see how many sales you need to make to pay your bills. Now you can come up with a realistic sales and marketing plan for your pitch deck.
Grab the free template at http://mikelingle.com/break-even-analysis/

Views: 1301
Mike Lingle

Watch more How to Start a Business videos: http://www.howcast.com/videos/307310-How-to-Determine-a-Breakeven-Point
In business, a company's break-even point occurs when its total revenue equals its total costs.
Step 1: Identify the fixed cost
Identify the fixed cost to produce the first unit of a product. For example, if the start-up cost is $20 to rent space for the first month of business, the fixed cost is $20.
Step 2: Identify the selling point
Identify the selling point. If the manufacturer plans to sell each product for $1, the selling point is $1.
Tip
Sales can be usually be increased by lowering the selling point, but that raises the break-even point.
Step 3: Identify the variable unit cost
Identify the variable unit cost. If it costs the manufacturer $0.57 to make each product, the variable unit cost is $0.57.
Step 4: Calculate the break-even point
Calculate the break-even point using the formula: Break-Even Point equals Fixed Cost divided by the Unit Price minus the Variable Unit Cost.
Did You Know?
Marketing managers use break-even points to evaluate profit potential and risks associated with marketing strategies.

Views: 17878
Howcast

The Finance Coach: Introduction to Corporate Finance with Greg Pierce
Textbook:
Fundamentals of Corporate Finance
Ross, Westerfield, Jordan
Chapter 11: Project Evaluation and Analysis
Objective 4 - Key Concepts:
General breakeven quantity
Accounting breakeven quantity
Contribution margin
*OCF at the accounting breakeven = Depreciation
Cash breakeven
*OCF at cash breakeven = 0 (Meaning it has an IRR of -100% and only covers fixed costs)
Financial breakeven
OCF at financial breakeven = Investment/PVa factor
More Information at: http://thefincoach.com/

Views: 4618
TheFinCoach

Ready for a business coach?
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Contractor Fight TV

Clicked here http://www.MBAbullshit.com/ and OMG wow! I'm SHOCKED how easy.. No wonder others goin crazy sharing this??? Share it with your other friends too!
Fun MBAbullshit.com is filled with easy quick video tutorial reviews on topics for MBA, BBA, and business college students on lots of topics from Finance or Financial Management, Quantitative Analysis, Managerial Economics, Strategic Management, Accounting, and many others. Cut through the bullshit to understand MBA!(Coming soon!)

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MBAbullshitDotCom

If you plan in starting a restaurant business in this week video I talk about one of the fundamental exercises you need to do. The break even point. This exercise will let you know how many customers you will need to serve per month to generate profit.
This video was created for the 30 Minutes Restaurant Marketing website, where every week I post a weekly restaurant marketing action plan that any restaurateur can perform in less than 30 minutes. You can see all videos here: http://30minutes.marketing/
If you were interested in this video and are planning in starting a restaurant, my video on How to Create a Restaurant Marketing Plan will also help you defining a marketing strategy for your restaurant. You can watch it here:
http://30minutes.marketing/blog/create-your-one-page-restaurant-marketing-plan
Transcript:
Hello and welcome to this week 30 minutes restaurant marketing, are you thinking about Opening a Restaurant? Learn the easy way to calculate your restaurant break even point.
The break even point will tell you what is the number of persons you have to serve in order to pass from making a loss to making profit. In this video I will explain it and show you an example.
First you need to calculate your costs. Costs can be fixed or variable. Fixed are the ones you always need to pay and the variable vary depending on how many people you serve at your restaurant.
Let’s start by your fixed costs. These are the ones that don't increase or decrease no matter how many customers you receive in your restaurant.
Examples of fix costs would be Rent, Insurance, Interest in money you borrowed from the bank, manager salary etc…
These are the costs that you need to pay no matter your restaurant has customers or no.
This Total Fixed Cost is easy to calculate as you just need to sum all your fixed bills that won't change its amount no matter how many people you serve at your restaurant. Let's think that for our example that the fixed total costs are $6,000.
Then comes the variable costs...
These are the ones related to the number of customers you serve in your restaurant. More customers’ means that you will need more food to serve, more beverages for your customers to drink, more tablemats, more servers, etc...
As they are variable depending on the number of people you serve, you need to calculate how much variable cost you have per person served. Let's think that on average one person that dines at your restaurant spend $15, how much is the variable cost of it? Meaning from that $15 your client paid, how much of it you need to use to pay your food suppliers, servers, paper napkins etc....
Let’s think you need to use $6 from the $15 you sold to pay your variable costs. Meaning that after you paid your variable cost you still keep $9 per customer.
So now you can easily calculate how many customers you need each month to break even. You just need to divide your fixed cost by the money you keep from each customer.
In my example would be. I have a fixed cost of $6,000. Then I subtract from the average check per person with its variable cost. Afterwards I divide the 6,000 per 9 and I get 667.
667 customers per month is my breakeven point. Meaning that if I serve 667 persons in a month I won't be losing or making money.
In case I make 668 covers, one more cover than my breakeven, I already made $9 of profit. Because with the first 667 customers I made the money to pay my fixed costs, after that, for any additional customer that comes in my door I make $9 of profit.
The reason is I no more need to spend that $9 dollars to cover my fixed costs. They already been paid by my first 667 customers.
Not that difficult right? This is the first math exercise I ask people to do when they thinking if they should open a restaurant or not.
Hope it helps and if you want to listen to future videos like this one please like, comment or share below.

Views: 9746
Paulo Calisto

What is a break even point in trading?
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Description

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David Parker

Note especially that break even appears in context with related terms and concepts from the fields of business analysis, finance, investment analysis definition a technique for analyzing how revenue, expenses profit vary changes sales volume. What does breakeven analysis mean in finance? Finally, farlex brings you all the rules of english grammar, one place, explained simple termsBreak even (economics) wikipediabreak full explanation & example what is analysis? Definition and meaning a break Break wikipediawhat business point? point firm need to how calculate definition formula wikieducator. You should understand the 15 dec 2010 a break even analysis is key part of any good business plan. Maybe even used the term before, or said at what point do we break even? But because you may not entirely understand math and definition of breakeven analysis in financial dictionary by free online english encyclopedia. Break even (economics) wikipedia. First we shall compute break even point using these two methods and then present the information graphically (preparation of example suppose fixed cost a factory in rs. When you've broken even, you are neither losing 2 jul 2014 in a world of excel spreadsheets and online tools, we take lot calculations for grantedyou've probably heard it. This method not only accounts for all costs, it also includes the opportunity costs of capital definition break even analysis is a adopted by firms to determine that how much should be produced or sold at minimum ensure project does lose moneythus, from both cases you will recover investment value and would get any returns on 1 oct 2017 in other words, point where company produces same amount revenues as expenses either during manufacturing process an accounting period. 10,000(4 2) 5,000 units. It's a fairly simple calculation and can prove very helpful in deciding whether to make an equipment purchase or knowing how close break even analysis is useful tool for determining at what point your company, new product service, will be profitable. The company didn't lose any money during the period, understanding company's break even point is important to small business owners. Total profit at the break even point is zero accounting method of calculating does not include cost working capital. Many owners desire to know how much they need achieve in sales realize a profit. Since revenues equal expenses, the net income for period will be zero. Break even (economics) wikipediabreak analysis full explanation & example what is breakeven analysis? Definition and meaning a break Break wikipediawhat business point? does the point mean firm need to how calculate definition formula wikieducator. This can be seen in the analysis explaining break even context. The break even point (bep) or level represents the sales amount in either unit (quantity) revenue (sales) terms that is required to cover total costs, consisting of both fixed and variable costs company. Breakeven analysis financial definiti

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Evette Freudenburg Tipz

Breakeven price refers to the price the underlying needs to be at expiration for the trader to obtain a P/L of $0.00. Mike breaks down examples in this segment, and explains why it is an important concept to understand!
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Views: 11933
tastytrade

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This video gives you a break even analysis tutorial of a predesigned excel template. This Excel Template is available to Small Business Owners and Analysts. Spreadsheets are perfect for measuring Break Even. The template does your break even calculations for your business decisions. Analyze the how many units you must sell in your business to break even. Analyze the relationship between fixed costs, variable costs and returns. Identify how many unit must be sold before your investment is profitable. Look at profitability potential whether 100 units are sold, or 1,000 units are sold.
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Join BeeBusinessBee in this tutorial that covers the topic of break even, investigating what it is? How it can be used by a business to make decisions and how it can be calculated both in graph and formula format.
This session is perfect revision for your BTEC Unit 2 Finance for Business exam, as well as a useful resource for any GCSE or AS Level Business Student.
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This video explains break-even point which is an essential concept in Engineering Economics. The video also uses a simple example to further clarify how this concept may be used for decision-making.

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Video related to Polimi Open Knowledge (POK)
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My managerial accounting vlog explaining CVP, Contribution Margin, and calculating break-even

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