It is necessary to set a correct and objective price for the product in order to: on the one hand, you had the opportunity to realize the maximum possible sales volume, that is, not to overcharge; on the other hand, it would be possible to get a good margin from each product sold, that is, not to make the price too low. Calculation of the financial safety margin It is known that calculating the break-even point shows what parameters of price, sales volume, and costs should be adher to in order to avoid ending up in the r.
The breakeven point can be useful not only at
The planning stage, but even during the preparation and qatar phone number library analysis of financial statements. For this purpose, the zero profit point is compar with the current revenue of the company. This parameter is call the financial safety margin (FSM). It shows how far the business indicators have mov away from the break-even point, that is, from the critical loss zone.
Let’s look at the actual business indicators
If your total revenue is 100,000 rubles, and the calculat break-even point for the company in monetary units is 60,000 rubles, then: ZFP = (100,000 – 60,000)/100,000 = 0.4 or 40% This means that under current conditions, the business has a reserve of 40% that it can use in the event of force majeure. This indicator should be monitor dynamically and its changes agency work to generate more leads observ. In case of constant and systematic decrease of the indicator, experts recommend taking measures.
Otherwise, in one of the periods the company may suffer losses
If the ZFP is higher than 0.5, this means that the minimum revenue exces. The TBU by 2 times, and the company has no financial problems. Let’s say that you understand buy lead that for your business 60% is an excellent profitability indicator. That you should strive for, and the break-even point level is 60,000 rubles, then. The revenue you ne to achieve = 60,000/(1-0.6) = 150,000 rubles. In conclusion, it is worth noting that all calculations and break-even point analysis are not necessary and useful in every case. You ne to follow the rules: In the end, we will consider a real example of how to use and calculate the breakeven point and its elements in practice. We will determine how it can help a business.
