That Blue Square Thing

BTEC First Business Unit 2 - Finance for Business

Note: this page was written for the 2012 BTEC First Award in Business. Although this still exists, I've not taught it for ages and the stuff here might be out of date. I'm leaving it here as an archive in case anyone finds it useful.
I was going to retire these pages in July 2021, but having looked at Google Analytics it seems people still use them. There's probably a business lesson there about knowing your client base or something...

Break-even Analysis

Learning Aim B1: Understand the planning tools businesses use to predict when they will start making a profit

Businesses need to know how much they need to sell to break-even. This is the point at which they make no profit and no loss - they break-even.

Planning effectively to identify this point is a really helpful thing for businesses to do.

The Break-even Chart

PDF iconBreakeven Charts - slides, including the basics of breakeven analysis

PDF iconLabelled Breakeven Chart - just the chart with some labels on it

PDF iconBreakeven Chart - an ambush assessment task!

The Break-even Formula

Once you can handle the chart you need to know how to use the Break-even Formula. Fortunately you don't need to remember the formula in the exam - it will always be given to you.

PDF iconThe Breakeven Formula - you don't need to remember this in an exam - but do need to know how to use it!

PDF iconPete's Pickles breakeven analysis - calculations to work through

Changes in the Break-even Chart

Changes in the Break-even Chart are quite tricky. I plan to produce some more materials to help revise this I think. For now, try this...

PDF iconChanges in the breakeven chart - a table to summarise changes which might occur and their impacts

Reasons for using Break-even Analysis

Once you're able to use the chart and the formula you need to understand the reasons for using them.

PDF iconBreakeven analysis - why it's important

PDF iconBreak-even analysis True/False to think about benefits and risks

PDF iconBreakeven analysis - a table to summarise the benefits and risks associated with it

The BBC Bitesize sitewiki link has some resources for costs, revenue and profit that mainly deal with the breakeven chart. The video linked to this sectionwiki link is a little complex at times, but is worth a look.