Sales price : the selling price you’ve determined for your product or service.Variable costs : costs that fluctuate according to your sales volume and number of units sold, such as raw materials and product costs, or the costs associated with performing your service.Fixed costs : costs that remain the same regardless of your sales volume, such as lease and rental payments or insurance payments.It can help you determine your pricing strategy, cash flow and other important financial health indicators.įactors that can help determine the break-even point include: But the break-even point is an extremely useful calculation for any business looking to reach profitability.įor new businesses, break-even analysis can be a vital part of your business plan. It may sound fruitless to determine a point that doesn’t portray a win or a loss, but simply a stasis. Conversely, a break-even analysis can also help you determine how many costs you need to cut to reach profitability. Once Goal Seek has found a solution, a Goal Seek Complete message pops up, and the result is displayed on the screen.Break-even analysis is important because calculating your business’s break-even point allows you to determine how much more revenue your business needs to generate before you can reach profitability. You can amend the Options to set the maximum iterations or the tolerance or time limit values.ĥ. Finally, select the cell where the result is placed (i.e., B3 – the number of units to be sold changes).ģ. Set the cell that contains the formula (e.g., F3) and then in the To Value field, enter the value you wish it to change to (i.e., 0). Goal Seek opens on the right-hand side of your screen. With the Google sheet in which you wish to use Goal Seek, In the Menu, select Add-ons > Goal Seek > Open.Ģ. If you don’t already have this add-on installed, see: How to Add Goal Seek to Google Sheets.ġ. In Google Sheets, you have to install the Goal Seek add-on. Calculate Break-Even Analysis Point in Google Sheets In this case, you need to sell 30 units in order to break-even. Since there are multiple variables, it may take a while to obtain an answer!Ĥ. Click OK to start the Goal Seek analysis.
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