Breakeven
True. Breakeven happens when the total revenue and expenses equal. Business owners can benefit from breakeven analysis in order to better understand their financial position. The calculation compares the fixed cost of the business with the variable costs involved in producing the products or services to be sold. (Runnels, 2020). It helps companies determine how many units are needed to make and sell enough to be profitable. It also allows businesses to assess their financial situation and forecast future performance. The breakeven analysis can be used by businesses to predict when profitability will occur. This tool is useful for companies to assess their financial status and then make educated decisions regarding pricing and production. Financial planning is incomplete without a breakeven analysis. This helps companies understand their financial situation and determine the optimal point to become financially profitable. Cont…
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