What is Breakeven Analysis?
A definition of Breakeven Analysis
“Breakeven analysis determines the point at which a business covers all costs and begins to make a profit by comparing fixed and variable expenses to revenue.”

Business Glossary > What is Breakeven Analysis?
Examples of Breakeven Analysis in a Sentence:
A breakeven analysis helps businesses plan their finances.
Before launching a new product, conduct a breakeven analysis.
Investors appreciate startups with a clear breakeven analysis.
Why is Breakeven Analysis Important in Business?
Breakeven analysis is crucial because it helps businesses determine when they will start being profitable. This information aids in financial planning, investment decision-making, and setting sales targets to ensure sustainability.
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Associated Terms
Here are some associated business terms and synonyms for “Breakeven Analysis”:
- Cost-Volume-Profit Analysis
- Break-even Point Assessment
- Profit Threshold Analysis
Starbucks Breakeven Analysis
Starbucks, when entering a new market, conducts a breakeven analysis to ascertain the feasible locations and product price points required to achieve profitability. This helps them understand the market better and strategize their operations more effectively.
Final Notes on Breakeven Analysis
Breakeven analysis is a fundamental financial tool that can guide business decisions regarding pricing, cost control, and sales planning. Understanding the implications of reaching breakeven can significantly aid strategic business growth and risk management.
This has been a definition of Breakeven Analysis meaning.
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