Plus Minus Of Breakeven

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Information about Plus Minus Of Breakeven

Published on September 25, 2008

Author: amasters

Source: slideshare.net

Break Even Analysis

Advantages of BEA Easy to understand and use Profit and loss is easy to calculate at different levels of output The impact of a change to cost can be measured by changing TC line Can measure the impact of a price change by moving the TR line Allows a company to carry out a “What If?” analysis

Easy to understand and use

Profit and loss is easy to calculate at different levels of output

The impact of a change to cost can be measured by changing TC line

Can measure the impact of a price change by moving the TR line

Allows a company to carry out a “What If?” analysis

Disadvantages of BEA Is too simplistic in assuming that all prices/costs are constant Any conclusions drawn are only as accurate as the data they are based on Assumes that all output is sold

Is too simplistic in assuming that all prices/costs are constant

Any conclusions drawn are only as accurate as the data they are based on

Assumes that all output is sold

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