Break-Even Analysis Unlocked: How to Understand the Profit and Loss Statement

How can you predict when a company will be profitable? Can you predict potential business losses and risk? Before making any investment decision, every company is able to run different financial analyses. These companies can survive in the short-term by using break-even analysis.

This course will allow you to learn everything necessary for a complete break-even analysis. This course will teach you how to identify and understand cost classifications, as well as how they relate to stability in your business.

Learn how to calculate and apply the break-even point (or BEP) to assess the feasibility and potential success of business ideas.

Learn how to analyze a profit and loss statement (P&L). This course will cover everything you need to know about P&L statements, from seasonality and income sources to the important bottom line: net profitability.

What is the margin for safety? It's simply the maximum amount of sales that can be lost before break-even is reached, and the company makes no profit. This calculation shows a business the number of sales it has achieved over its BEP.

This course will explore the principles of margin safety and profit and examine the output to determine the required profit.

Additionally, you will be able to perform break-even analysis with formulas and templates. Finally, you will be introduced operational gearing (or operational lever) which is the relationship between fixed and variable costs in a company.