How to do break-even analysis in Excel?

Break-even analysis can help you get the point when the net profit is zero, which means the total revenues equals to the total expenses. It is quite useful to price a new product when you can forecast your cost and sales.

Recommended Productivity Software

Office Tab: Use tabbed interface in Office as the use of web browser Chrome, Firefox and Internet Explorer.
Kutools for Excel: Adds 120 powerful new features to Excel. Increase your productivity in 5 minutes. Save two hours every day!
Classic Menu for Office: Brings back your familiar menus to Office 2007, 2010 and 2013 (includes Office 365).

Supposing you are going to sale a new product, and you know the variable cost of per unit and the total fixed cost. Now you are going to forecast the possible sales volumes, and price the product based on them.


Hint


Step 1: Make an easy table, and fill items with given data in the table. See the following screen shot:

Step 2: Enter proper formulas to calculate revenue, variable cost, and profit.

  • Revenue = Unit Price x Unit Sold
  • Variable Costs = Cost per Unit x Unit Sold
  • Profit = Revenue – Variable Cost – Fixed Costs

Step 3: Click the Data >> What-If Analysis >> Goal Seek.

Step 4: In the Goal Seek dialog box,

  • Specify the Set Cell as the Profit cell, in our case it is Cell B7;
  • Specify the To value as 0;
  • Specify the By changing cell as the Unit Price cell, in our case it is Cell B1.
  • Click OK.

Now it changes the Unit Price from 40 to 36, and calculates the net profit to 0.

Therefore, if you forecast the sales volume is 50, and the Unit price cannot be less than 36, otherwise loss occurs.

Download complex Break-even Template

http://office.microsoft.com/en-us/templates/breakeven-analysis-TC001116512.aspx
http://office.microsoft.com/en-us/templates/break-even-analysis-TC001017515.aspx


Is your problem solved?

Recommended Productivity Tools

The following tools will greatly save your time and effort, which one do you prefer?
Office Tab: Using handy tabs in your Office, as the way of Chrome, Firefox and New Internet Explorer.
Kutools for Excel: 120 powerful new functions for Excel, Increase your productivity in 5 minutes. Save two hours every day!
Classic Menu for Office: Bring back familiar menus to Office 2007, 2010, 2013 and 365, as if it were Office 2000 and 2003.

Kutools for Excel

gold star1 Amazing! Increase your productivity in 5 minutes. Don't need any special skills, save two hours every day!

gold star1 More than 120 powerful advanced functions which designed for Excel:

  • Merge Cell/Rows/Columns without Losing Data.
  • Combine and Consolidate Multiple Sheets and Workbooks.
  • Compare Ranges, Copy Multiple Ranges, Convert Text to Date, Unit and Currency Conversion.
  • Count by Colors, Paging Subtotals, Advanced Sort and Super Filter,
  • More Select/Insert/Delete/Text/Format/Link/Comment/Workbooks/Worksheets Tools...

Screen shot of Kutools for Excel

btn read more     btn download     btn purchase