Break even analysis excel is a tool to define profit and loss sheet and to determine how much sale volume is needed to achieve the “no profit- no loss” condition. Break even is a saddle point of the profit and loss graph where a business neither makes any loss nor any profit.
With a break even analysis excel, you as a CEO or a business owner can understand wherein the total financial aspect of your organization a profit or loss has been made; simply you will have an idea what the financial health of your company is. This Break-Even Analysis Excel template shows you the fixed costs, the price for materials needed, the volume of the materials, and how these all things affect organization’s net profit.
How the concept of Break Even Analysis Excel template Helps?
Minimum Sales Volume Needed to Avoid Losses
Break even analysis helps a business owner to find out the minimum sales volume required for replenishing all the costs. So it’s really important to determine which product should be sold and in which volume it should be sold to avoid putting money from your own pocket! The expected sale volume provides a concept how many units should be sold not to incur losses.
Plan Your Profit Levels
Break-even analysis is a great tool especially when you are selling different products with different price range and profit margin. After getting the initial response from the customers, you can easily set which product should be sold in large quantity and which product can be sold in less quantity to drive the business from the clutches of the loss. It helps in determining the sale volume and targets both.
Once you have fond out the breakeven point, you can easily determine how many units you need to sell to generate your desired profits.
Set the Optimum Price for each product or services
It’s one of the major decisions before product launch. You must have homework about the price of the products. An accurate pricing can lead your business to success while the reverse one can pull your efforts towards losses.
So determine the product pricing and profitability from each product once you have calculated your average cost to sell a product, then you can easily calculate how much product you need to sell and which products you should emphasize on. The price of the products seldom affects inventory also.
If you tag a product with high price and get a heavy stock, then the clearance of the stock may take time and stock for a product with lesser price tag may not get proper space in your warehouse!
Schedule Your Inventory Requirements
It’s an important decision to stock products for selling. Getting products into inventory ensures timely delivery of the products to the customer because you have the products in your warehouse, not in the hand of the vendors! Getting the customer feedback, you can plan which products you should purchase to maintain optimum stock.
Break Even Analysis Excel Template Online
The online world is filled with numerous break even analysis excel template, but some of those are not that attractive to move with. After some research, we have found some editable breakeven analysis excel sheet which you can opt for your business easily.
These are easy to edit and go with, but even if you face any issue always knock here by commenting below. Let us know how did you like Break even analysis excel.