Break-Even Calculator
Calculate break-even points for business decisions, investments, or refinancing. Find out how many units you need to sell, when an investment pays off, or if refinancing is worth the closing costs.
Break-Even Type
Business Costs
Break-Even Point
Revenue needed: $100,000
Profit at Different Sales Levels
| Units | Revenue | Total Costs | Profit/Loss |
|---|---|---|---|
| 1,000 | $50,000 | $75,000 | -$25,000 |
| 1,500 | $75,000 | $87,500 | -$12,500 |
| 2,000 | $100,000 | $100,000 | $0 |
| 2,500 | $125,000 | $112,500 | $12,500 |
| 3,000 | $150,000 | $125,000 | $25,000 |
| 4,000 | $200,000 | $150,000 | $50,000 |
Units Needed for Target Profit
| Target Profit | Units Needed | Revenue Needed |
|---|---|---|
| $10,000 | 2,400 | $120,000 |
| $25,000 | 3,000 | $150,000 |
| $50,000 | 4,000 | $200,000 |
| $100,000 | 6,000 | $300,000 |
Understanding Break-Even Analysis
Business Break-Even
Break-even is where revenue equals total costs. Below this point you lose money; above it you profit. Key formula: Fixed Costs ÷ (Price - Variable Cost) = Break-Even Units.
Investment Break-Even
Compare your investment's expected return to a risk-free alternative. The higher the return difference, the faster you'll come out ahead. But remember: higher returns usually mean higher risk.
Refinance Break-Even
Divide closing costs by monthly savings to find break-even months. If you'll move or refinance again before break-even, it's not worth it. Generally, aim for break-even under 3 years.
Frequently Asked Questions
What is break-even analysis?
Break-even analysis determines the point where revenue equals costs—no profit or loss. It helps answer:
- Business: How many units must I sell?
- Investment: When will this outperform alternatives?
- Refinance: When will savings exceed closing costs?
How do I calculate business break-even?
Break-Even Units = Fixed Costs ÷ Contribution Margin
Where Contribution Margin = Selling Price - Variable Cost per Unit
Example:
- Fixed costs: $50,000
- Selling price: $100
- Variable cost: $60
- Contribution margin: $40
- Break-even: $50,000 ÷ $40 = 1,250 units
When is refinancing worth it?
Break-Even Months = Closing Costs ÷ Monthly Savings
Refinancing is worth it if:
- You'll stay in the home past break-even
- Break-even is under 2-3 years (general rule)
- You won't refinance again before break-even
What is contribution margin?
Contribution margin is selling price minus variable cost. It represents how much each sale contributes to covering fixed costs and generating profit.
- Higher margin = fewer sales needed to break even
- Margin ratio = Contribution Margin ÷ Selling Price
- A 40% margin means 40¢ of each $1 covers fixed costs/profit