What is Breakeven Analysis in Strategic Management?

Learn Breakeven Analysis definition in strategic management with explanation to study “What is Breakeven Analysis”. Study breakeven analysis explanation with strategic management terms to review strategic management course for online MBA programs.

Breakeven Analysis Definition

  • A technique for identifying the point at which total revenue is just sufficient to cover total costs.

    Management by Stephen P. Robbins, Mary A. Coulter

Breakeven Analysis Explanation

Breakeven analysis is the initial investment examination is a strategy generally utilized by creation the board and the executives bookkeepers. It depends on sorting creation costs between those which are "variable" (costs that change when the generation yield changes) and those that are "fixed" (costs not legitimately identified with the volume of creation). All out factor and fixed expenses are contrasted with deals income all together with decide the degree of offers volume, deals worth or creation at which the business makes neither a benefit nor a misfortune (the "earn back the original investment point"). Make back the initial investment investigation involves the figuring and assessment of the edge of security for a substance dependent on the incomes gathered and related expenses. Dissecting diverse value levels identifying with different degrees of interest a business uses equal the initial investment examination to figure out what level of offers are important to cover the organization's complete fixed expenses. An interest side examination would give a vender critical knowledge in regards to selling abilities.

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