### Break-Even Point in Sales

The break-even point in sales is a situation in which a company has no profits or
losses or otherwise, is the sales level which makes zero profit. Any sale, above the break-even point represents a
company's profit.

To calculate the break-even point of a company with multiple product lines, we use, as a mean to simplify, the concept
of contribution margin (CM) rather than the unit contribution margin.

The contribution margin is the difference in value or percentage, between the sales and the sum of the direct variable cost and variable expenses and shows the revenue contribution to cover
fixed costs and expenses.

The Safety Margin is an indicator that tells how much sales can decrease before reaching the losses. Consequently, we can say that, a negative margin of safety
indicates losses.

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To calculate the Break-Even Point in sales, enter data as requested, using the point as a decimal separator.
Ex 22,532.34 enter: 22532.34 and the results will be displayed automatically after one click on **Calculate**.

### Related Topics

DuPont Analysis Investments - Net Present Value Discounted Cash Flow (DCF) Internal Rate of Return (IRR) Modified Internal Rate of Return (MIRR) Average Interest Rate Average Rate of Return Break-Even Point in Quantities Break-Even Point (BEP) in Sales French Amortization System Constant Amortization System German Amortization System Sinking Fund American Amortization System Canadian Mortgage Amortization Amortization - Average Constant and French Straight Line Depreciation Method Sum of Digits Depreciation Method (SYD) Balance Sheet Analysis Cash Flow Statement by Direct Method Cash Flow Statement by Indirect Method