Break-Even Sales Formula and Examples

by Michael Cannon in Tech · 0 comments

Break-even sales will help you understand you minimum amount of sales revenue needed before making a profit.

Key

BES = Breakeven Sales
FE = Fixed Expenses
VE = Variable Expenses
ESP = Expected Sales Percentage of Goods and Services
NI = Needed Inventory
NS = Needed Sales

BES = FE / (1 – VE)

FE = 9000
VE = 60%

BES = 9000 / (1 – .6)
BES = 22,500

NS = BES / ESP

ESP = 80%

NS = 22,500 / 80%
NS = 28,125

NI = NS * VE

NI = 28,125 * .6
NI = 16,875


10/22/2001 – Originally posted

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About Michael Cannon

Hello, I'm Michael Cannon, Peichi's smiling man, an adventurous water-ratchief technology officer, cyclist, poet, WWOOF'er and world traveler.

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