Break-even level of the enterprise. The break-even point is determined by analyzing the ratio of indicators, how to calculate sales volume

Break even (break-even point) - a point on the break-even chart in the coordinates revenue-costs / months (period) or the volume of sales of products and services calculated by the formula equal to the volume of production at which the company’s expenses are compensated by its income. The production and sale of the subsequent product unit brings the company its first profit.

The economic meaning of the break-even point is revenue at which profit is zero or revenue can cover all the company’s fixed and variable costs. Reaching the break-even point means reaching the recoupment of the company's total costs.

Break-even point value:

• The break-even point shows from what amount received into the company's account the profit begins.
• knowledge of the break-even point can determine the minimum level of revenue below which production will not pay off;
• The break-even point indirectly shows below what price you cannot fall when selling a product.

Break-even point is calculated in units of production, in monetary terms or taking into account the expected profit margin. Classically, the break-even point, calculated from the number of units of production, assumes the recoupment of total costs.

Break-even point formula in monetary terms:

TB d = (V x W post) / (V - W lane)

Where:
TB d - break-even point in monetary terms;
B - sales revenue;
Z post - fixed costs;
Z lane - variable costs.

Break-even point in physical terms (in units of production):

TB n = Z lane / (C - Z sp)

Where:
Z lane - variable costs;
P - price per unit of production;
Z sp - average variable costs per unit of production.

There is a certain mutual influence and interdependence between costs, production volume and profit. It is known that, subject to all other conditions being equal, the growth rate of profits always exceeds the growth rate of product sales. With an increase in the volume of product sales, the share of fixed costs in the structure of product costs decreases and the “extra profit effect” appears.

• horizontally – period control points (days of the month, months or years),
• vertically – revenue in rubles.
• also vertically – the company’s expenses for the same period in rubles.

The break-even point is the point at which the revenue line crosses and goes above the total (gross) cost line. If you plot the profit line on the same chart, then the break-even point will show the control point on the horizontal axis of the chart (period), where the profit line crosses 0 and moves from the loss zone to the profit zone.

Break-even analysis(CVP analysis - cost volume profit) or break even point (break point, break-even point in this case) shows what can happen to a company’s profit when the volume of production and (or) sales of products, services changes, prices and basic cost parameters change companies.

The break-even point shows a certain amount of money that an enterprise or brand receives as a result of its work, and at the same time it is able to cover all existing costs, namely fixed and variable.

Fixed costs do not directly depend on the quantity of products produced or services provided and include:

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• remuneration, namely management;
• rental of production space and equipment;
• property taxes;
• deductions for depreciation;
• payment to security services.

Variable costs depend on the production process, the volume of products produced and services provided. These include:

• payment of utilities;
• deductions for wages of full-time workers;
• costs associated with the purchase of fuel;
• purchase of basic and component materials;
• costs of purchasing raw materials.

It should be noted that if the company fully and without any problems pays off the invoices received, then it operates without losses and has the amount of funds that is called the break-even point. It can be presented in calculations both in monetary terms and in units of sold or produced products.

Calculation options

To find the break-even point you need to follow several steps, namely:

• collecting information about production volume, quantity of products sold, the presence or absence of profits and losses;
• determining the amount of fixed and variable costs;
• calculation of the break-even point and certain safety zones;
• conclusion based on the data obtained, with the help of which you can estimate the level of sales and the optimal production volume, which will ensure the financial stability of the company;

The analytical method involves calculating such a volume of production, the implementation of which income will cover all existing expenses, namely, profit in this case should be equal to zero. When using this method, one should take into account information on the sale of all manufactured products, that is, what was produced was sold without any leftovers.

The graphical method involves constructing a graph with two axes X and Y, on which the volume of production and revenue with variable, fixed and production costs are plotted, respectively. The point at the intersection of costs and sales revenue is called break-even.

How to calculate

Any calculations should be carried out based on the values ​​of one period of time, for example, it could be a year, half a year, quarter, month. It is also necessary to take into account the type of activity of the institution. Let us present the formulas for the break-even point for a store, enterprise and production.

An enterprise that trades has more than 1000 units of product names in stock; therefore, to find turnover at the break-even point, accounting uses the formula:

Tb = (Z total / %R) * 100%.

Where, Z total – total costs

%R is the percentage of profitability, determined by the ratio of cost and unit price.

The search for a break-even point for an enterprise begins with determining profit using the formula:

P = V– Z DC – Z AC

Where, P – profit,

V – sales revenue,

Z post – fixed costs,

Z variable – variable costs.

Accordingly, revenue from the sale of services can be calculated using the following formula:

V = P + Z DC + Z AC

Since the profit at the break-even point is equal to zero, the revenue formula will be as follows:

V = Z DC + Z AC or

C * Tb = Z DC + Z AC * Tb.

From here, Tb in physical terms is calculated using the formula:

Tb = Z DC / (C – Z AC).

Where, C is the price per unit of the product.

And Tb in monetary terms:

Tb = V * Z DC / (V – Z AC).

Calculation example

The “Plyushka” store is a trading enterprise that sells bakery products from the “Khleb” company. The product is provided in a wide range of more than 2000 items. The average price for bakery goods is 44 rubles.

The company's established sales profitability rate is 52%. At the same time, fixed costs are equal to 48,000 rubles, and include rental payments in the amount of 25,000 rubles, for advertising - 5,000 rubles, and variable costs for staff salaries amount to 18,000 rubles.

Tb = (48000 / 52%)*100%,

Tb = 92307 rubles.

To determine the payback of the project (Op) of the store, you should divide Tb / C average, hence accordingly:

It follows from this that for effective and profitable work it will be enough if 2098 customers come to the store in a month to purchase bakery goods.

The calculation of the break-even point for the Khleb enterprise, which produces bakery products, is carried out on the basis of the proposed data. The average price for products is 36 rubles, variable costs per unit are 8 rubles, fixed costs are 120,900 rubles, 3,000 products are produced per month. Sales revenue is 108,000 rubles.

To calculate the break-even point of an enterprise, you must use the formula in monetary terms Tb = V * Z post / (V – Z variable):

Tb = 108000 * 120900 / (108000 – 24000),

Tb = 13057200000 / 84000,

Tb = 155443 rubles.

The 120,908 rubles received mean that the company will receive zero profit if it produces products for the calculated amount.

The break-even point for production will be calculated using the formula Tb = Z constant / (C – Z variable) in physical terms:

Tb = 120900 / (36 – 8),

Tb = 120900 / 28,

Tb = 4318 pieces.

Taking into account the data obtained, it should be concluded that the company needs to increase production to 4318 units; having reached this volume, the profit will be zero.

How to calculate the break-even point in Microsoft Excel

Complex and voluminous economic calculations should be carried out in Excel for convenience. To do this, just enter the appropriate formulas to get the result.

Schedule

Constructing a break-even chart is an integral part of the calculations. It clearly shows the efficiency of work, profit and loss.

Building a break-even point based on analytical calculations of a store, enterprise and production in Excel will look like this:

For enterprises, firms and other legal entities, calculating the break-even point is an important criterion for assessing their activities. Analytical data reflects the feasibility of doing business and possible adjustments in case of non-receipt of profit.

The essence of the calculations carried out is revealed when constructing a graph, which displays to a greater extent and clearly all the necessary information with the help of which it is possible to draw conclusions. This includes the volume of production, all existing costs, both in kind and in monetary terms.

Not only an economics specialist can understand the information presented on the graph. This is due to the fact that the area located above the break-even point always indicates a profit and vice versa. With this data, it is possible to make changes to production or service policies. And also in the Microsoft Excel program, it is possible to predict future changes before translating them into reality.

Determining the break-even point is the cornerstone of the effective functioning of any enterprise. The calculation of this indicator is of paramount importance not only for the owners of the enterprise, but also for its investors. If the former must understand when production becomes profitable, then the latter must be aware of the value of this indicator in order to make an informed decision about providing financing.

What is the break-even point and what does it show?

This indicator helps to understand when a company stops incurring losses, but is not yet able to earn a profit. At the same time, the production and sale of any additional unit of production entails the formation of profit. Thus, the break-even point is a certain starting point from which the enterprise can begin to develop effectively. Those. this indicator is a kind of indicator that the company is moving on the right path.

This indicator is also called profitability threshold or simply BEP(from English break-evenpoint). It characterizes the volume of production of a product at which the proceeds from its sale will be equal to the costs of its production.

What is the economic meaning of determining the value of this indicator? The profitability threshold indicates the enterprise's ability to recoup its costs.

The break-even point occurs when expenses are covered by income. The company records profit when this indicator is exceeded. If this indicator is not achieved, then the company suffers losses.

So, the break-even point shows:

• the level above which the company begins to record profits;
• the minimum acceptable level of revenue, if below which the production of products ceases to pay off;
• the minimum acceptable level of pricing, below which one cannot fall.

In addition, the determination of this indicator allows:

• identify problems that are associated with changes in the break-even point over time;
• identify how it should be possible to change the volume of output of a product or its production when the price varies;
• calculate how much it is advisable to reduce revenue so as not to incur losses.

Determining the profitability threshold helps investors determine whether a given project is worth financing if it breaks even for a given sales volume.

Video - break-even point analysis:

Thus, most management decisions are made only after the break-even point has been calculated. This indicator helps in calculating the critical value of sales volume at which the company's costs become equal to revenue from sales of goods. Even a slight decrease in this indicator will indicate the beginning of bankruptcy of the company.

Important! When the company crosses the break-even point, it will begin to record profits. Until then, it operates at a loss.

Calculation formulas

The profitability threshold can be measured in physical or monetary terms.

In both cases, to determine the profitability threshold, it is important to first calculate the costs of the enterprise. To do this, we introduce the concept of fixed and variable costs.

Fixed costs do not change over time and are not directly dependent on sales volume. However, they can also change under the influence of, for example, the following factors:

• changes in company performance;
• expansion of production;
• changes in rental prices;
• changes in general economic conditions, etc.

These typically include the following costs:

• payment of management expenses;
• rent;
• depreciation deductions.

Variable costs are a more unstable value, which depends on changes in production volume. This type of cost includes:

• payment of wages and other deductions to workers;
• costs of raw materials and the purchase of necessary materials;
• purchase of components and semi-finished products;
• energy payment.

Accordingly, the amount of variable costs will be higher, the greater the production volume and sales volume.

Variable costs per unit of manufactured goods do not change when the volume of its production changes! They are conditionally permanent.

Having defined the concept and types of costs, let’s find out how to calculate the break-even point (BEP) in kind. To do this we use the following formula:

BEP (in physical terms) = fixed costs / (unit selling price - variable costs per unit)

It is advisable to use this formula when the enterprise is engaged only in the production of one type of product. However, this is extremely rare. If an enterprise produces a wide range of products, then indicators for each type are calculated separately using a special extended formula.

When calculating the break-even point in monetary terms another formula is used:

BEP (in monetary terms) = (fixed costs / marginal profit) * revenue from product sales

For correct calculations, we use actual data on costs and revenue for the analyzed period. In this case, indicators that relate to the same analysis period should be used.

However, the use of this formula is correct when determining BEP with marginal profit, which is positive. If it is negative, then the BEP value is determined as the sum of fixed and variable costs that are relevant to a given period.

Video about the importance of determining the profitability threshold in business:

Or you can use another formula for calculating the profitability threshold:

BEP (in monetary terms) = Fixed costs / KMD,

where KMD is the marginal profit coefficient.

In this case, the KMR can be determined by dividing the MR (marginal income) by revenue or price. In turn, MD is obtained using one of the following formulas:

MD = V - PZO,

where B is revenue,

VZO – variable costs for sales volume.

MD = C - PZE,

where C is the price,

PZE – variable costs per unit of goods.

Calculation examples

For greater clarity, let’s look at examples of calculating the break-even point using the example of an enterprise and a store.

For an industrial enterprise

Let's say the following conditions are given. The company produces one type of product. At the same time, the cost per unit of production is 50,000 rubles. Price – 100,000 rubles. Fixed costs - 200,000 rubles. It is necessary to calculate the minimum volume of goods produced at which the enterprise will reach the profitability threshold. Those. we need to calculate the BEP in physical terms. We use the above formula and get:

BEP (in physical terms) = 200,000/(100,000-50,000) = 40 (product units).

Conclusion: thus, when producing at least 40 units of product, the enterprise will reach the break-even point. An increase in the volume of products produced by the enterprise will lead to profit.

For the store

In the following example, we will calculate the break-even point for a store. Let’s assume that the store is a grocery store and has the following fixed costs (in rubles):

• rent of space – 80,000;
• salaries of managers – 60,000;
• insurance premiums – 18,000;
• utility bills - 10,000.

Total: 168,000 (rubles).

The conditions also give the values ​​of the cost variables:

• energy payment – ​​5,000;
• raw material costs – 10,000.
• Total: 15,000 (rubles).

Let’s assume that the amount of revenue is 800,000 rubles. Let's define BEP in cost terms. First, let's calculate the marginal profit. To do this, subtract variable costs from revenue and get 800,000 – 15,000 = 785,000. Then the KMD will be 785,000 / 800,000 = 0.98.

Then the break-even point will be equal to fixed costs divided by the resulting coefficient, or 168,000/0.98 = 171,429 rubles.

Conclusion: Thus, the store must sell goods worth 171,429 rubles in order for income to be greater than expenses. All subsequent sales will bring net profit to the store.

Schedule

In order to find the profitability threshold, you can use the graphical method of calculating this indicator. To do this, we will display on the graph fixed and variable costs, as well as total (gross) costs. The break-even point graphically corresponds to the point of intersection of the gross revenue and total cost curves.

Let's look at this with an example.

The following conditions are given (in rubles):

• revenue amount – 100,000;
• production output – 100 (pieces);
• fixed costs – 25,000;
• variable costs – 30,000.

Having marked these data on the graph, we get the following conclusion: the enterprise will be at the break-even point when it receives income in the amount of 35,700 rubles. Thus, if an enterprise sells goods in quantities of more than 35 units, then it will record a profit.

Calculating the break-even point using formulas in Excel

It is very easy and convenient to calculate the profitability threshold using Excel - to do this, you just need to enter the initial data into the appropriate table, after which, using programmed formulas, we will obtain the value of the profitability threshold for our case, both in monetary and in kind terms.

You can download the calculation of the break-even point in Excel for a manufacturing enterprise specializing in the production of parts in the engineering industry at.

The graph and formula for calculating the break-even point in Excel for the general case are given

This is largely due to the comparative simplicity, clarity and accessibility of break-even point calculations. However, it must be borne in mind that the break-even model formulas are only suitable for those decisions that are made within an acceptable range of prices, costs and production and sales volumes. Outside this range, unit and per unit selling prices are no longer assumed to be constant, and any results obtained without such limitations may lead to incorrect conclusions. Along with its undoubted advantages, the break-even model has certain disadvantages, which are associated, first of all, with the assumptions underlying it.

When calculating the break-even point, they proceed from the principle of a linear increase in production and sales volumes without taking into account the possibility of a jump, for example, due to the seasonality of production and sales. When determining the conditions for achieving break-even and constructing the corresponding schedules, it is important to correctly set data on the degree of utilization of production capacity.

Analysis of the break-even point is one of the important ways to solve many management problems, since when used in combination with others, its accuracy is quite sufficient to justify management decisions in real life.

The break-even point determines what the sales volume must be in order for the company to break even and be able to cover all its expenses without making a profit. In turn, how profits grow with changes in revenue is shown (operating leverage).

To calculate the break-even point, you need to divide the costs into two components:

Variable costs - increase in proportion to the increase in production (volume of sales of goods).

Fixed costs do not depend on the number of products produced (goods sold) and whether the volume of operations increases or decreases.

The break-even point is of great importance in the matter of the viability of the company and its solvency. Thus, the degree to which sales volumes exceed the break-even point determines the margin of financial strength (margin of stability) of the enterprise.

Let us introduce the following notation:

B - sales revenue.
Zper - variable costs.
Postage - fixed costs.
C - price per piece.

Formula for calculating the break-even point in monetary terms:

Tbd = V*Zpost/(V - Zper)

The formula for calculating the break-even point in physical terms (in units of products or goods):

Tbn = Zpost / (C - ZSper)

In the figure below, the break-even point Tbn = 20 pieces

At the break-even point, the income line crosses and goes above the line of total (gross) costs, the profit line crosses 0 - moves from the loss zone to the profit zone.

Theoretical and methodological basis for determining the break-even point

For the successful development of the economy of any enterprise, it is necessary to study the relationship between the volume of production (sales) of products and costs and profits. This ratio is analyzed to study the complex of cause-and-effect relationships of the most important indicators of the final results of the enterprise, and the scientific substantiation of management decisions.

Tasks and stages of determining the break-even point of production

According to Vakhrushina, in the process of determining the break-even point, the following main tasks are solved:

The volume of sales is calculated at which full coverage is ensured;
- the volume of sales is calculated, which ensures, other things being equal, the amount of profit required by the enterprise;
- an assessment is made of the sales volume at which the enterprise can be competitive in the market, i.e., the calculation of the safety zone (field).

According to Sheremet A.D. The main steps in determining a safety point are:

1. Collection, preparation and processing of initial information in accordance with the conditions for analyzing the relationship between the volume of production (sales) of products and costs and profits;
2. Calculation of fixed and variable costs, break-even level and safety zone;
3. Justification of the volume of sales required to ensure the planned amount of profit.

Classification of costs into fixed and variable

Total costs, according to the degree of dependence on the volume of production, are divided into fixed and variable.

Experiment with different values ​​for fixed expenses, production costs, and product sales price and see how these values ​​affect the profitability of the business.

Evaluate the different options for allocating costs between fixed and variable costs from the previous assignment. See how this affects the number of sales required to reach the breakeven point.

To quickly calculate the number of sales, use the formula:

TBU (quantity) = SPR/(PC-SP)

For the example data we get 10000/(500-300) = 50 units of production. If the product is purchased one per person, then you need to do everything to create 50 potential buyers per month.

Calculation of TBU for several products

In the case of multiple products, you can calculate the required number of sales for each product if you first calculate the average selling price based on the sales margin of each product. If you have a small range of products or services, you can calculate the average selling price.

Knowing the cost of each of your products, calculate the cost of average sales:

(Selling Price Product_A) * 0.12 + (Selling Price Product_B) * 0.81 + (Selling Price Product_N) * 0.7 = average price per sale.

From the previous example, let us assume, for ease of calculation, the same margin for all products (margin) of 45%. The average selling price (ASP) in this case will be the average cost (SP) * (1+ 0.45). Then

TBU (in monetary units) = TBU (quantity) * SPC.

For our example, 50 * 500 USD. = 25000 USD That is, you need to earn at least 25,000 USD per month so that you can recoup all costs.

If you have data on the average purchase (in cu) per customer for a similar business, then you can get the number of customers who are willing to purchase your products to provide the required income for your business.

Number of buyers = TBU (in monetary units) / average purchase size. Let's assume that the cost of an average purchase is 750 USD, then we need to serve 25,000/750=34 customers.

Plug your calculations into a spreadsheet and determine the break-even point for your product or products. Assess whether your business can attract enough customers in 3-4 months to then sell that or more units of the product each month. Reduce fixed costs. At first, refuse a prestigious office or expensive equipment. Reduce all fixed expenses to a minimum. Try to reduce the cost of your product.

If you doubt the correctness of your theoretical calculations (and this should always be the case) because you do not have reliable information about the preferences of potential customers, then you need to test your assumptions about the price of the product in practice before opening a business. The test method is to develop and execute a startup marketing plan.

It is your responsibility to make sure in practice that your calculations are close to reality. If the results turn out to be bad, then abandon this business idea - it is not profitable.

It is necessary to calculate break-even points not only before starting a business, but also during its operation. It doesn't take much time and isn't difficult at all. It's much more difficult to achieve this in real life.

If the number of sales per month and the number of buyers required are quite realistic based on your work experience, then start planning a starting marketing plan to determine how to attract them, how to improve the product and how much money will be needed for this.

Enterprise break-even point

Variable expenses depend on the firm's business activities. If sales increase, then variable costs also increase. And vice versa. This, by the way, gives you the opportunity to regulate such costs. Variable costs are determined by how much resources and money are spent per unit of output. These include both and logistics costs.

Fixed expenses are a weight on the feet of an enterprise. Payment for rent of premises, salaries to employees, monthly payments for financial obligations, etc. It is advisable to minimize fixed expenses in order to have better dynamism in the development of the business.

Your task is to calculate all the variable and fixed costs of your company. Only after this can you calculate the break-even point, the point above which profit will begin. What income is needed to cover all your expenses for a month, quarter, year? How much do you need to sell to get that kind of income from your products?

We determine how much margin (profit) we get from each unit of product sold.

For example, if you sold a unit of product for 10 rubles, and spent 5 rubles, then the margin will be 5 rubles.

If a month's fixed costs amount to 100 rubles, then you need to divide 100 rubles by 5 rubles (margin) - and you will get that to reach the break-even point you need to sell 20 units of products. This is a calculation in physical terms, in units of production.

In value terms, we multiply 20 units by the selling price of 10 rubles and get 200 rubles. This will be the break-even point of your business scheme. That is, after selling 21 units you will have a net profit!

The break-even point directly depends on what price you set for the product and how much you can sell over a certain period, that is, how much turnover you can make, and with what markup.

It is clear that at certain costs, increasing the price of your product will reduce the time to reach the break-even point and will provide more net profit. Therefore, work with price and marketing to increase sales comes to the fore.

Break-even point analysis

1. Brief information about the tool

Break-even analysis is a useful tool for examining the relationship between fixed costs, variable costs and profits. Break-even Point determines when an investment will generate a positive return. This can be shown graphically or simply mathematically. Break-even analysis calculates the physical volume of production at a given price required to cover all costs. Break-even price analysis calculates the price required for a given level of production to cover all costs. To explain how break-even analysis works, it is necessary to define costs.

Fixed costs incurred after the decision to begin business operations are not related to the level of production. Fixed costs include (but are not limited to) equipment, interest costs, taxes and general expenses. Total fixed costs – The sum of fixed costs.

Variable costs are directly related to production volume. They may include cost of goods sold or production expenses, such as labor and electricity costs, food, fuel, veterinary services, irrigation and other expenses directly related to the production of commodities or investment in a capital asset. Total Variable Cost (TVC) is the sum of the variable costs for a given level of output or production.

Average variable cost is the variable cost per unit produced, or TVC, divided by the quantity produced.

Break-even Point analysis should not be confused with Payback Period, the time it takes to recoup an investment.

In the terminology of Value Based Management, the break-even point should be defined as the level of the operating profit ratio at which the business/investment receives the minimum acceptable level of profitability, i.e. total capital costs.

BEP can be calculated using the following formula:

BEP = TFC/(SUP - VCUP)

Where:
BEP - break-even point (product units);
TFC - total fixed costs / total fixed costs;
VCUP - variable costs per unit of production,
SUP - sales price to the production department.

2. Using the tool when developing a business plan

The main advantage of break-even analysis is that it explains the relationship between costs, output and profits. It can be expanded to show how changes in fixed-variable cost ratios, raw material prices, or revenues will affect revenue levels and break-even points. Break-even analysis is most useful in simulation modeling using partial budgeting or capital budgeting methods. The main advantage of using break-even analysis is that it shows the minimum level of economic activity required to avoid losses.

The main limitations of break-even point analysis:

Best suited for single product analysis;
there may be difficulties in classifying costs, both variable and fixed;
There may be a tendency to continue to use break-even analysis after changing the cost and revenue functions.

3. Approaches to developing a business plan

There are the following options for executing/preparing a business plan:

Independent development by the project initiator;
transferring the project to third party specialists for development.

In this case, the following forms of execution/preparation of a business plan are possible:

Individual development by one specialist;
individual (personalized) development, but with the participation of a TOP manager who will be responsible for the implementation of the project;
collegial (with the help of a working group) development of a project with the participation of a TOP manager who will be responsible for the implementation of the project.

Depending on the:

Availability of the necessary specialists with the appropriate level of qualifications,
economic and technological complexity of the project itself,
specific investor requirements,
experience in the target market and with the selected volumes of activity, etc.

Works can be in 6 different combinations of forms and options. However, only 2 of them are acceptable (indicated in the figure by green areas), both from the point of view of cost justification and from the point of view of the quality of the project’s development and its suitability for justifying the effectiveness of the project to investors and for further use during implementation. At the same time, independent (by the enterprise itself) personalized development with the involvement of a top manager is acceptable when developing small and uncomplicated projects in familiar areas of activity. For large projects (with a large volume of investments, involving new technologies, external investors, with the prospect of entering new markets), the most practical option is to develop it by a group of third-party specialist consultants with the obligatory involvement of a top manager in the process, who will subsequently implement the project.

4. Statistics on the protection of business plans and business development plans developed by Lex Group - 100%.

The most significant and successfully justified (protected) business plans (investment projects) in 2008-2009:

Business plan for the development of the activities of Tyumenstalmost LLC until 2013 (for obtaining commercial loans and government support);
business plan for the construction of a multi-storey parking lot, a car service center and a car showroom in Tyumen (to attract a strategic investor);
business plan for expanding the production capacity of the livestock complex of CJSC MTS Gagarinskaya (to obtain a preferential loan);
business plan for the investment project “Development of a recreational zone in the area of ​​Lake Marukhi, Abatsky municipal district, Tyumen region” (to receive government funding);
investment memorandum “Recreation center “Lesnaya Skazka” (to search for a strategic investor);
business plan for the construction of the Vershina shopping and entertainment complex, Khanty-Mansi Autonomous Okrug (to attract investors and receive government support);
financial and economic justification for the development strategy of the Shuryshkarsky district of the Yamal-Nenets Autonomous Okrug;
project for the creation and development of the Khanty-Mansi Autonomous Okrug Agro-Industrial Holding (to attract investors and obtain government funding);
business plan for organizing a Call Center in the Tyumen region (to attract a private investor);
business plan for organizing the production of a unique organic fertilizer in the south of the Tyumen region on an industrial scale (to attract private investors);
business plan for creating an enterprise for processing mercury-containing household and industrial waste in Tyumen (to attract private investors).

Profitability break-even point

Profitability indicators characterize the financial results and efficiency of the enterprise. They measure the profitability of an enterprise from various positions and are systematized in accordance with the interests of participants in the economic process.

Profitability can be of the following types:

A) the overall profitability of the associations,
b) actual overall profitability,
c) estimated profitability

Profitability indicators characterize the financial results and efficiency of the enterprise. They measure the profitability of an enterprise from various positions and are grouped in accordance with the interests of participants in the economic process and market exchange.

Profitability indicators are important characteristics of the factor environment for generating enterprise profits. Therefore, they are mandatory when conducting and assessing the financial condition of an enterprise. When analyzing production, profitability indicators are used as an investment policy tool and.

The main profitability indicators can be grouped into the following groups:

1) indicators of return on capital (assets),
2) product profitability indicators;
3) indicators calculated based on cash flows.

Fixed costs (C);
Variable costs (V);
Let us denote the actual volume of sales (Qf);
Total costs parallel to direct ones. Total costs (S);
Sales revenue (VR);
at the intersection of BP and S there is point K and its intersection with OX - Qcr, with OU - Rcr.

Qf - Qcr = MB (safety margin); Вр - Rкр = ЗПФ (margin of financial strength)

The break-even point is the volume of sales at which the income received provides reimbursement for all costs and expenses, but does not provide the opportunity to make a profit, i.e. this is the lower volume of output at which the profit is 0. Formula for calculation:

Qcr = C/(C – Vprem.cost)

Profitability threshold - sales revenue at which the company no longer has losses, but does not yet make a profit:

Rcr = Qcr * C

Margin of financial strength is the amount by which a company can afford to reduce revenue without leaving the profit zone (in rubles):

ZFP = Вр - Rкр

Margin of safety – sales volume minus critical production volume (pcs.):

Mb = Qf - Qcr

Break-even point safety margin

When determining the break-even point, you need to divide costs into two components:

Variable costs - increase in proportion to the increase in production (volume of sales of goods).
Fixed costs do not depend on the number of products produced (goods sold) and whether the volume of operations increases or decreases.

The break-even point is of great importance to the lender because he is interested in the viability of the company and its ability to pay interest on the loan and the amount of the principal debt. Thus, the degree to which sales volumes exceed the break-even point determines the margin of stability (margin of safety) of the enterprise.

Let us introduce the following notation:

B - sales revenue.
Рн - sales volume in physical terms.
Zper - variable costs.
Postage - fixed costs.
C - price per piece.
Zsper - average variable costs (per unit of production).
Tbd is the break-even point in monetary terms.
Tbn is the break-even point in physical terms.

Break-even point formula in monetary terms:

Tbd = V*Zpost/(V - Zper)

Break-even point formula in physical terms (in units of products or goods):

Tbn = Zpost / (C - ZSper)

How far the enterprise is from the break-even point shows the margin of safety.

Formula for safety margin in monetary terms:

ZPd = (B -Tbd)/B * 100%

Safety margin formula in physical terms:

ZPn = (Rn -Tbn)/Rn * 100%

The margin of safety shows how much revenue or sales volume must decrease for the company to reach the break-even point.

The margin of safety is a more objective characteristic than the break-even point. For example, the break-even points of a small store and a large supermarket can differ thousands of times, and only the margin of safety will show which of the enterprises is more stable.

Building a break-even point

1) Break-even point - the minimum volume of production and sales of products at which costs will be offset by income, and with the production and sale of each subsequent unit of product the enterprise begins to make a profit.

2) The axes of the coordinate system are constructed.

The following designations are introduced:

Abscissa axis - Op, production volume (pieces).

The ordinate axis is two axes: the first is designated Z, “Costs” (thousand rubles); the second is designated D, “Income” (thousand rubles).

The origin of coordinates is “0”.

Numerical intervals are plotted along the axes. The numbers are signed on the graph.

3) On the “Costs” axis there is a numerical value corresponding to the amount of fixed costs. The corresponding figure is signed and a straight line of fixed costs is constructed (parallel to the “Production Volume” axis). In the figure, fixed costs have a value of 190.7 thousand rubles.

4) A direct variable cost line is constructed. The straight line comes from the origin of the coordinate system. To construct variable cost points, the variable cost value is sequentially multiplied by each of the production volume values ​​indicated on the graph. The obtained values ​​are plotted along the “Costs” axis. For example, an annual production volume of 84 thousand pieces corresponds to a cost point of 6165 thousand rubles.

From the points on the “Production Volume” axis and the corresponding ones calculated and plotted on the “Costs” axis, perpendiculars are constructed, at the intersection of which we obtain the points of the graph of conditionally variable costs. The constructed straight line is signed “Variable costs”.

5) A straight line of total costs is constructed. To do this, with a known volume of production, the values ​​of fixed and variable costs corresponding to a given volume of production are added up, the resulting value is plotted on the “Costs” axis, and then the point on the fixed costs graph is found.

6) A straight line of total income is constructed. To construct this straight line, the coordinates of the income points are found for a given sales volume (equal to the production volume). To do this, the sales volume is multiplied by the price per unit of the product (clause 7). The resulting value is plotted on the “Income” axis. At the intersection of the “sales volume” and “total income” coordinates, the “Total Income” graph point is marked.

7) At the intersection of the lines “Total costs” and “Total income” there is a break-even point (signed on the chart). The coordinates of the break-even point must be marked and signed on the chart. In Fig. 4 is a point with coordinates 23.5 thousand units, 2250 thousand rubles.

8) Loss and profit zones are indicated and signed on the chart.

9) The month (year) in which the break-even point is reached is determined. To do this, an axis divided into months (years) is laid below the x-axis. Each month is matched to the amount of fulfillment of the monthly production = sales plan. The values ​​are taken from the Op axis. In our case, shown in Fig. 4, this is 7 thousand pieces. monthly. By the end of the year (end of December) - 84 thousand units.

A flexible organization is needed that allows you to quickly switch to performing work that is in demand. The value of such flexibility lies in the timely exit from ineffective work due to the fairly high break-even point for variable costs.

The inability to work with break-even points is one of the significant reasons for the decline in Russia's economic development. This inability leads to an underestimation of the importance of creating a flexible enterprise structure aimed at different market segments. The lack of a flexible enterprise structure and focus on different market segments leads to a smaller number of possible options, up to their complete absence. A small number of options leads to small break-even points for variable costs. Low break-even points, in turn, lead to the need to perform unprofitable work.

Break-even point planning

The process of drawing up a break-even plan for the company's activities is part of drawing up the overall financial plan of the company.

Let's take a closer look at all stages of the break-even planning process:

I. Analysis of the state of affairs in the company and the situation in the sales markets. This implies an analysis of the strengths and weaknesses of the company’s activities from the point of view of internal and external factors. By internal factors, first of all, we mean cost analysis (see 3.1.), taking into account the possibilities of transforming the cost structure in order to minimize them. Note that minimizing costs, in addition to often production and technical issues, is also greatly influenced by the level of management at the enterprise and the activities of supply services. External factors are considered, first of all, as those objective features of the market environment that have a positive or negative impact on the activities of the enterprise. Such factors include: the market share controlled by the firm and the tendency to change it; the activities of competitors, changes in consumer preferences, changes in the general financial situation in the country where the company operates, etc.

II. Forecast of future prices for factors of production and finished products. Based on the data shown in paragraph I, predictive planning of the price factors of the commodity market that interest us is carried out. For this, it is especially useful to consider statistically the indicators discussed in paragraph I and analyze the dynamics of these indicators, including using economic and mathematical methods. If the enterprise does not have the capabilities to conduct this kind of analysis, then it can be limited to simple extrapolation of existing trends in price changes on the market. At the same stage, prices to counter possible unfavorable price changes are determined. In particular, issues of hedging price risk through the use of commodity futures and options can be considered.

III. Calculation of variable and fixed costs.

Applying the methodology set out in paragraph 3. 1., to the predicted values ​​of prices and non-production costs, it is necessary to calculate the cost of manufactured products. In this case, it is necessary to plan the use of the volume of work in progress and the degree of completion of individual stages of work. Here the need for fixed and working capital is determined, and the estimated sources of their formation are determined. If the need for financial resources is satisfied through external loans, then the amount of non-productive expenses must include the costs of the loans received.

IV. Calculation of break-even point.

We determine the break-even point based on the calculation of the cost of products and the estimated selling price. Schemes for calculating the break-even point are set out in $ 2. After calculating the volume of production required to cover fixed costs, the required safety margin is determined. This approximate value depends on the stability of the external environment in which the company operates. Naturally, the more unstable the external environment, the larger the safety margin should be. After determining the safety margin, we calculate the volume of production and sales of products necessary to achieve the required level of safety margin.

V., VI. Determining the pricing policy of the enterprise

Based on the analysis of the future state of the market carried out in paragraph II, we determine at what price level and pricing policy of the enterprise the required sales volume is achieved. After this, the break-even point and the adjusted safety margin are recalculated. If this value does not satisfy the criterion specified in paragraph IV, then we repeat paragraphs V and VI again, with other price values. If it is not possible to achieve an acceptable safety margin, then it is necessary to repeat the analysis in III, paying attention to reducing costs. With such an operational process, we achieve a production plan with safety margins and selling prices that satisfy the initial requirements.

VII. Acceptance of the final plan

Based on the sales prices and sales volumes determined in paragraphs V, VI, the final calculation of the break-even point is made, and a sales plan is drawn up, broken down by period. In this case, the moment of reaching the break-even point is determined.

VIII. Break-even control

Break-even control includes several aspects that we only mention: control of production costs, cost control, control of the implementation plan, control of income receipts, control of the implementation of the break-even plan. It is clear that cost control and control of the sales plan and revenue receipts test the two components of the break-even concept. Comprehensive break-even control consists of continuous monitoring of income received and current costs of the company, determining what position the company is in relative to the break-even point. Such a presentation of the issues of planning and control of break-even is omitted due to the fact that this work has a limited scope.
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- the sales volume at which the company covers all its expenses without making a profit.

Its value plays an important role in the sustainability and solvency of the company. The degree to which sales volumes exceed the break-even point determines the (stability margin) of the enterprise. In turn, how profit grows with changes in revenue.

Formula for calculating break-even point

To calculate the break-even point, you need to divide the costs into two components:

• - increase in proportion to the increase in production (volume of sales of goods).
• - do not depend on the number of products produced (goods sold) and on whether the volume of transactions grows or falls.

Let us introduce the following notation:

Formula for calculating the break-even point in monetary terms:

(in rubles, dollars, etc.)

Tbd = V*Zpost/(V - Zper)

Formula for calculating the break-even point in physical terms:

(in pieces, kilograms, meters, etc.)

Tbn = Zpost / (C - ZSper)

Example of calculating the break-even point

The same data on the graph. Break-even point Tbn = 20 pieces

At the break-even point, the income line crosses and goes above the total cost line, the profit line crosses 0 - it moves from the loss zone to the profit zone.

How fixed costs, variable costs and price affect the break-even point, see.

At first glance, the formula for calculating the break-even point is quite simple, and there should not be any difficulties in calculating it. But in reality, everything is not so simple.

Four important assumptions when calculating the break-even point

1. We are talking about revenue (sales volume), so we believe that all for sale produced or purchased products. Warehouse stocks are not taken into account.
2. Variable costs are directly proportional depend on sales volume. This doesn't always happen. For example, the case where in order to increase production volume it was necessary to build a new workshop will have to be calculated in a more complex way.
3. Fixed costs do not depend from sales volume. This doesn't always happen either. If, in order to increase the volume of production, it was necessary to build a new workshop, hire more management personnel, increase payment for utilities - this case also does not fit the general formula.
4. Break-even point is calculated for the enterprise as a whole or for some average product.

When calculating the break-even point, probably the most important limitation is assumption 4. To make the calculation for each product separately, you need to know what share of fixed costs falls on each product. If there are many products, calculating break-even points separately for each product becomes a complex task that requires a large amount of calculations.