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How to calculate Break-even revenue

The Break-even revenue formula, with plain worked examples you can check yourself.

Break-even revenue = F ÷ CM ratio

Worked examples

F = 50000 · CM ratio = 40%Break-even revenue = 125,000
F = 10000 · CM ratio = 25%Break-even revenue = 40,000
F = 40000 · CM ratio = 50%Break-even revenue = 80,000

How to use it

  1. Write down the values for each letter in the formula.
  2. Do the brackets first, then divide or multiply.
  3. Check the units before you compare results.
  4. Compare the answer with last period or with a competitor to see if it is good or bad.

This formula belongs to Costs & Break-even.

Related terms

RevenueFixed costsVariable costsCost of goods soldOverheadDepreciation

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