BTEC First Business Unit 2 - Finance for Business
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
Breakeven Charts - slides, including the basics of breakeven analysis
Labelled Breakeven Chart - just the chart with some labels on it
Breakeven 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.
The Breakeven Formula - you don't need to remember this in an exam - but do need to know how to use it!
Pete'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...
Changes 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.
Breakeven analysis - why it's important
Break-even analysis True/False to think about benefits and risks
Breakeven analysis - a table to summarise the benefits and risks associated with it
The BBC Bitesize site
has some resources for costs, revenue and profit that mainly deal with the breakeven chart. The video linked to this section is a little complex at times, but is worth a look.