break even key words Flashcards
(4 cards)
1
Q
margin of safety
A
the amount of sales would have to fall before break even point is reached
2
Q
importance of break even analysis to business when planning for success
A
- helps show a business what it needs to sell to cover its cost
- help to calculate predicted profit or loss
3
Q
risk of not completing break even analysis
A
- will not know how many items need to be sold to break even
- difficult to set targets
4
Q
break even
A
when the money a business receives(revenue) is the same as the money it’s paying out(expenditure). There is no profit or loss
