Break Even Analysis Template

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Break Even Analysis Template for two different Gross Margin Percentages

This Break Even Analysis Template helps you calculate your break even sales point using two different gross margin percentages. The fixed expenses are arranged in categories, such as: Salary and Related Costs, Vehicle costs, Utilities and Other.

This break even analysis template is a little different from the standard one in that it takes into account your actual cash needs and not only costs which would normally appear on your profit and loss statement.

It therefore calculates your breakeven point which would not only allow you to generate zero net profit, but also meet your ongoing cash obligations.

Break Even Analysis Template After entering your Gross Margin and Fixed Expenses in the categories provided, you will be able to see the break even sales point at two different gross margin levels. $4.95

 


 

Break Even Units and Targeted Profit Template

This Break Even Template will calculate your break even units. You will need to enter your variable expenses per unit - both the amounts as well as any percentages you may have. For example, you may pay your sales people commissions based on sales. That would be a percentage you would enter here. Fixed expenses are arranged in categories, such as: Salary and Related Costs, Vehicle costs, Utilities and Other.

This Break Even Template will also calculate the number of units and the amount of sales you will need to reach a certain profit target.

Break Even Units Template After entering your unit price for a product you are analyzing, your unit variable costs, fixed costs and a target profit amount, you will be able to see the break even units and sales points and units and sales needed to generate the targeted profit. $4.95

Using financial templates will save you hundreds if not thousands in time and money. Make sure your computer comes with Microsoft Excel Software. Many computers come preloaded with Microsoft Excel.

After finalizing your purchase, you will be able to download zipped files. These balance sheet templates will be available for you to download 3 times within the next 120 days.

To open the Zipped version, you'll need to install a program like WinZip. You can download a free copy here.

The Importance of Break Even Analysis

Calculating your break even point is very important for the management of your bottom line. Other than knowing at which point you will start breaking even, you really cannot set prices for your products or know when your margins are a problem. The break even analysis can be used on a single product, a group of products or on your entire business.

Gross Margin as Part of the Break Even Analysis

One of the prerequisites of an accurate break even calculation will be how well you can calculate your margin. If you have only a few products, it will not be a problem, but if your inventory is more complex and you actually produce assemblies, you will need to calculate your product costs using some kind of inventory software. QuickBooks can do it easily, if you are set up for it correctly.

Your product margin, or gross profit ratio, is a pivotal part of the break even point calculation. It is very important that you have the right number, because even a few percentage points could make a big difference and steer you in the wrong direction with your pricing decisions.

How to calculate your gross profit margin:

Add all your product–related variable costs, such as:

• materials
• labor
• direct overhead
• indirect overhead

Subtract the total of these costs from your sales. That will be your gross margin. Now divide that number by your sales – that's your gross margin percentage.

Fixed Costs as Part of the Break Even Analysis

The next element of your break even analysis will be your fixed costs. These are your overhead expenses. By the way, I like to point out that no expense is really fixed in an absolute sense. Even rent can be variable, because you can always move, renegotiate your rent, sublet part of your space, etc. So, the nomenclature here – variable vs. fixed – is really relative. Variable costs for the purpose of break even sales point calculation will be those costs which will fluctuate depending on your level of sales. They are directly linked to sales. So, if you have more sales, you will automatically spend more on these items.

So, getting back to your fixed costs. The typical categories here are your administrative staff, office expenses, including phone, rent, utilities, insurance, etc.

The assumption underlying the break even point calculation is that you need to generate enough sales to cover your fixed costs. And that what will pay for your fixed costs is your gross margin. So, the higher your margin, the less you will need to sell to cover your overhead.

Obviously, the lower your overhead, the easier it will be to generate sufficient amount of sales to cover it.

The Break Even Analysis Formula

The break even analysis formula is Total Fixed Costs divided by your Gross Margin percentage.