What Is Gross Margin?
Gross margin shows how much of each rupee of sales is left after the direct cost of making or buying what you sold.
Read guide →What Is Break-even?
Your break-even point is the amount you need to sell so that revenue equals total costs. Below it you make a loss; above it you make a profit.
Knowing it helps you set prices, decide whether a new product is worth launching and see how much cutting costs would help.
Formula
Break-even Units = Fixed Costs ÷ (Selling Price − Variable Cost per Unit)
Example
Fixed costs ₹60,000, price ₹200 and variable cost ₹120 per unit: 60,000 ÷ 80 = 750 units, or ₹1,50,000 in sales.
Try it yourself
Use the free Break-even Calculator to work out your own numbers.
Open Break-even CalculatorFrequently asked questions
What are fixed and variable costs?
Fixed costs, like rent, stay the same regardless of sales. Variable costs, like materials, rise with each unit sold.
What if price is lower than variable cost?
Then each sale adds to your loss and you can never break even until you raise the price or cut cost.
More guides
What Is EBITDA?
EBITDA measures operating earnings before interest, tax, depreciation and amortization.
Read guide →Revenue vs Profit
Revenue is the money you bring in. Profit is what you keep after costs.
Read guide →BizCalc provides calculators and educational information for general informational purposes only. Results are estimates and should not be considered financial, tax, accounting or investment advice.