Break-Even Point

It's simple and everyone talks about it. The break-even point (BEP) is where gains cover costs: the point where the gains from business equal the costs incurred. In other words, break-even point is the point at which cost or expenses and revenue or income are equal; there is no net loss or gain. At BEP, a profit or a loss has not been made, although opportunity costs have been paid, the capital is received, and the risk is adjusted. From there on one can expect profits.⁴ Conceptually a business might start making profits beyond a break-even point. Once financial statements and the data are in place, we can figure out break-even using the following formula as

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