Break-Even Point Calculator

Determine the break-even point where total revenue equals total costs — the point at which your business starts making a profit.

About Break-Even Analysis

Break-even analysis is a critical tool for business planning and decision-making:

Break-Even Point: The number of units you must sell to cover all costs. Beyond this point, every unit sold generates profit.
Contribution Margin: The amount each unit contributes toward covering fixed costs (Selling Price − Variable Cost).
Contribution Margin Ratio: Percentage of each rupee of revenue that contributes to fixed costs and profit.
Margin of Safety: How much sales can drop before you reach break-even. Higher margin = lower risk.

Formulas:

Break-Even Units = Fixed Costs ÷ Contribution Margin per Unit
Break-Even Revenue = Fixed Costs ÷ Contribution Margin Ratio
Contribution Margin = Selling Price − Variable Cost per Unit
Contribution Margin Ratio = Contribution Margin ÷ Selling Price × 100
Margin of Safety = (Actual Sales − Break-Even Sales) ÷ Actual Sales × 100

About Break-Even Point Calculator

The Break-Even Point Calculator determines the sales volume or revenue at which a business covers all its costs — both fixed and variable — and starts making a profit. The break-even point (BEP) is calculated as: BEP (units) = Fixed Costs / (Selling Price per Unit - Variable Cost per Unit), or BEP (revenue) = Fixed Costs / Contribution Margin Ratio. This is a fundamental business planning metric for FY 2026-27.

Understanding your break-even point is essential before launching a product, starting a business, or making investment decisions. It tells you the minimum sales needed to avoid losses and helps set realistic targets. Our calculator also computes the margin of safety (how much sales can drop before you hit break-even), contribution margin per unit, and provides sensitivity analysis showing how changes in price, volume, or costs affect profitability.

Key Features

Break-even in units and revenue
Contribution margin computation
Margin of safety analysis
Sensitivity analysis (price, volume, cost changes)
Multi-product break-even with weighted average

Frequently Asked Questions

How is the break-even point calculated?

The break-even point is calculated by dividing total fixed costs by the contribution margin per unit (selling price minus variable cost per unit). For example, if fixed costs are ₹5 lakh, selling price is ₹500 per unit, and variable cost is ₹300 per unit, the contribution margin is ₹200. Break-even = ₹5,00,000 / ₹200 = 2,500 units. In revenue terms, it would be 2,500 × ₹500 = ₹12,50,000.

What is the margin of safety?

The margin of safety is the difference between actual (or expected) sales and the break-even sales, expressed as a percentage of actual sales. For example, if actual sales are ₹20 lakh and break-even is ₹12.5 lakh, the margin of safety is (₹20L - ₹12.5L) / ₹20L = 37.5%. This means sales can drop by 37.5% before the business starts incurring losses. A higher margin of safety indicates lower business risk.

Break-Even Point Calculator