Break Even Analysis (BEA)
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La análise del punto de equilibrio se refiere a la determinación del nivel de operación donde los ingresos totales son iguales a los costos totales, lo cual ayuda a evaluar las ganancias o pérdidas en diferentes niveles de operación. Su importancia radica en facilitar el pago de dividendos, evaluar la rentabilidad financiera de proyectos alternativos, y determinar el costo mínimo para un nivel de producción específico. Además, la construcción de un gráfico permite visualizar la relación entre los ingresos de ventas y los costos, estableciendo el punto exacto donde la empresa no tiene ni ganancias ni pérdidas.
Break Even Analysis (BEA)
- 3. Meaning Break-even analysis refers to ‘ascertainment of level of operations where total revenue equals to total costs’. It is an analysis used to determine the probable profit or loss at any level of operations. Break-even analysis is a method of studying the relationship among sales revenue, variable cost and fixed cost to determine the level of operation at which all the costs are equal to its sales revenue and it is the no profit no loss situation
- 4. Significance 1. By finding out the break-even point, the Break-even analysis helps in establishing the point where from the firm can start payment of dividend to its share-holders. 2. It evaluates the percentage financial yield from a project, and thereby helps in choice between various alternative projects. 3. By using break-even analysis, the firm can determine minimum cost for a given-level of output. 4. The break-even analysis can be used in finding the selling price which would prove most profitable for the Firm. 5. It helps in determining the target capacity for a firm to get the advantage of minimum unit cost of production.
- 5. Construction of chart 1. Sales volume or output in units is shown horizontally on the X-axis. 2. Sales revenue and costs are shown vertically on the Y- axis. 3. A fixed cost line is drawn parallel to the X-axis because, with any volume of production, the fixed cost shall remain the same. 4. The variable cost line is depicted above the fixed cost line, which shows that the cost is increasing with the increase in the volume of output. This line can also be regarded as the total cost line because it starts from the point where variable cost is zero and certain fixed cost has been incurred.
- 6. 5. The figures of sales are plotted from the origin and a line is drawn up which goes in the upward direction with the increase in production or sales. 6. The total cost line and sales line shall intersect each other at one point. A perpendicular can be drawn from this point to find out the level of output where the business shall be at no-profit no-loss position—since the total costs are equal to total sales revenue here. 7. If the business produces less than this (break-even) level of output, it shall be running at a loss. The amount of loss is shown by the lower sales line and upper total cost line. 8. If the business produces more units than the break- even level, profit shall result and it shall be higher and higher as the production or sales increases. This is shown by upper sales line and lower total cost line.