How do you know when you'll make a profit? Jim and Kay Stice explain the ins and outs of breakeven analysis and cost-volume-profit analysis, and what it means for your business.
Overview
Syllabus
Introduction
- The basics of breakeven analysis
- Importance of breakeven analysis
- Cost-volume-profit (CVP) analysis
- When variable costs become fixed costs
- Breaking down fixed and variable costs
- Fixed and variable cost examples
- Pricing a service to cover costs
- Identifying high contribution margins
- Contribution margin and profitability
- Calculate a company's breakeven point
- McDonald's breakeven point
- When to conduct breakeven analysis
- Breakeven equation and covering costs
- Breakeven equations for an airline
- Breakeven analysis for multiple products
- Importance of total contribution margin
- How to forecast a target profit
- Calculate McDonald's target profit
- Analyzing a business before making changes
- What-if analysis for multiple scenarios
- Lessons for running a profitable company
- Risks and rewards of fixed costs
Taught by
Jim Stice and Earl Stice
