Break-Even Sales Formula and Examples

Asia, Taiwan

Break-even sales will help you understand you minimum amount of sales revenue needed before making a profit.

Key

BES = Breakeven Sales
FE = Fixed Expenses
VE = Variable Expenses
ESP = Expected Sales Percentage of Goods and Services
NI = Needed Inventory
NS = Needed Sales

BES = FE / (1 – VE)

FE = 9000
VE = 60%

BES = 9000 / (1 – .6)
BES = 22,500

NS = BES / ESP

ESP = 80%

NS = 22,500 / 80%
NS = 28,125

NI = NS * VE

NI = 28,125 * .6
NI = 16,875


10/22/2001 – Originally posted

Author Michael Cannon

Michael Cannon is the man behind Peimic.com AKA Peichi’s smiling man, Drusus’ baba, an adventurous water-rat, Axelerant’s chief operations officer, cyclist, photographer, poet, and WWOOF’er with over 750,000 kilometers traveled.

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