## 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.

**Do break-even analysis with Goal Seek feature**

**Do break-even analysis with formula**

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** Do break-even analysis with Goal Seek feature**

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.

1. Make an easy table, and fill items with given data in the table. See left screenshot:

2. Enter proper formulas to calculate revenue, variable cost, and profit. See left screenshot:

**Revenue** = Unit Price x Unit Sold

**Variable Costs** = Cost per Unit x Unit Sold

**Profit** = Revenue – Variable Cost – Fixed Costs

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

4. In the opening Goal Seek dialog box, please do as follows (see above screenshot):

(1) Specify the **Set Cell** as the Profit cell, in our case it is Cell B7;

(2) Specify the **To value** as **0**;

(3) Specify the **By changing cell** as the Unit Price cell, in our case it is Cell B1.

(4) Click **OK** button.

5. And then the Goal Seek Status dialog box pops up. Please click the **OK** button to apply it.

Now it changes the Unit Price from 40 to 31.579, and the net profit changes to 0. Therefore, if you forecast the sales volume is 50, and the Unit price cannot be less than 31.579, 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

** Do break-even analysis with formula**

Comparing to the Goal Seek feature, we can also apply the formula to do the break-even analysis easily in Excel.

1. Make an easy table, and fill items with given data in the table. In this method, we suppose the profit is 0, and we have forecasted the unit sold, the cost per unit, and fixed costs already. See below screenshot:

2. In the table, type the formula =B6/(B2-B4) into Cell B1 for calculating the Unit Price, type the formula =B1*B2 into Cell B3 for calculating the revenue, and type the formula =B1*B4 into Cell B5 for variable costs. See below screenshot:

And then when you change andy one value of forecasted unit sold, cost per unit, or fixed costs, the value of unit price will change automatically. See above screenshot:

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Save a range as AutoText entry (remaining cell formats and formulas) for reusing in future

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## Comments

is it possible that I don't have any fixed costs?

I'm buying and selling stuff from home.

If I have a cost per unit amount, would this also be considered a 'fixed cost'?

Thanks

Felix