About the Break-Even Analysis Calculator
The Break-Even Analysis Calculator is free to use and all calculations run entirely in your browser. Break-even analysis is a fundamental business tool that tells you exactly how many units you need to sell — or how much revenue you need to generate — before your business starts making a profit. It is essential for pricing decisions, business planning, and evaluating new product launches.
Key Concepts Explained
- Fixed costs — costs that remain constant regardless of production volume, such as rent, salaries, and insurance
- Variable costs — costs that change with each unit produced, such as raw materials, packaging, and direct labour
- Contribution margin — the selling price minus the variable cost per unit; this is the amount each sale contributes towards covering fixed costs
- Contribution margin % — the contribution margin expressed as a percentage of the selling price
Break-Even Formula
The break-even point in units is calculated as: Fixed Costs ÷ Contribution Margin per Unit. For example, if your fixed costs are €8,000 per month and each unit contributes €23 after variable costs, you need to sell 348 units to break even. The calculator also shows the break-even revenue figure by multiplying units by your selling price.
Target Profit Planning
This tool goes further by calculating the units and revenue required to achieve a specific profit target — not just break even. This is useful for setting realistic monthly sales goals and understanding the gap between covering costs and generating meaningful returns.
Who Should Use This Tool
Break-even analysis is valuable for start-up founders validating a business model, small business owners reviewing pricing, product managers evaluating new lines, and students studying business or economics. Use it alongside your profit margin calculator for a complete picture of your business economics.
Related Calculators
- Profit Margin Calculator — Gross, operating and net margin.
- Budget Planner — Monthly income vs expenses analysis.
- Loan Repayment — Monthly payments and total interest for any loan.