FT Finance Tools

Break-Even Calculator

Calculate break-even units and revenue, contribution margin and margin of safety from fixed costs, variable cost and price per unit.

🔒 Runs entirely in your browser — nothing is uploaded

Break-even units

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Break-even revenue

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Contribution margin

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Margin of safety

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Units sold Revenue Total cost Profit
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What break-even analysis tells you

Break-even analysis finds the sales volume at which your business, product or project stops losing money. At that point total revenue = total costs. Every sale beyond it adds profit, and every sale short of it leaves a loss. The analysis splits costs into two types: fixed costs, which do not change with volume (rent, salaries, software), and variable costs, which rise with every unit you make or sell (materials, packaging, payment fees).

The formulas

The building block is the contribution margin = price per unit − variable cost per unit, the amount each sale contributes toward fixed costs. From it: break-even units = fixed costs ÷ contribution margin, and break-even revenue = fixed costs ÷ contribution margin ratio, where the ratio is contribution margin ÷ price. To reach a goal, use units = (fixed costs + target profit) ÷ contribution margin. The margin of safety is (expected units − break-even units) ÷ expected units; the larger it is, the more sales can drop before you lose money. Profit at any volume is simply units × contribution margin − fixed costs.

Using the results

The profit table shows revenue, cost and profit at a range of sales volumes, so you can see where the sign flips from loss to profit. To improve your break-even, you can raise the price, cut variable cost or reduce fixed costs — each raises the margin or lowers the hurdle. Keep in mind the model assumes a constant price and constant variable cost per unit, and fixed costs that do not step up as you grow. Real businesses have discounts, capacity limits and mixed products, so treat the output as a planning estimate rather than financial advice. Everything is computed locally in your browser.

How to use

  1. Enter your costsType your total fixed costs for the period and the variable cost to produce or deliver one unit.
  2. Enter the selling priceAdd the price you charge per unit. It must be higher than the variable cost.
  3. Add optional targetsEnter the units you expect to sell for margin of safety, and a target profit if you want one.
  4. Read the resultsSee break-even units and revenue, contribution margin, margin of safety and a profit table by sales volume.

Frequently asked questions

What is the break-even point?
It is the sales volume where total revenue equals total costs, so profit is exactly zero. Below it you lose money; above it you profit.
What is contribution margin?
It is price per unit minus variable cost per unit. Each unit sold contributes that amount toward covering fixed costs and then profit.
What is the margin of safety?
It shows how far sales can fall below your expectation before you reach break-even: (expected units − break-even units) ÷ expected units.
What counts as a fixed cost?
Costs that stay the same regardless of volume in the period, such as rent, salaries, insurance and subscriptions. Variable costs such as materials or shipping change with each unit.
Why is break-even in units rounded up?
You cannot sell part of a unit, so the whole-unit figure is rounded up to the first unit count that actually covers costs.
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