📈 Metrics

Break-even point

How much you must sell before you stop losing money.

Formula

Break-even units = Fixed costs ÷ Contribution margin per unit

Break-even is the sales volume where total revenue exactly equals total cost.

It answers questions like ‘how many units before this new store pays off?’

🧮 Example

A cloud kitchen has ₹3 lakh fixed costs a month and earns ₹150 contribution per order → break-even = 2,000 orders a month.

🎯 Interview tip

Then sanity-check it: is 2,000 orders a month (~67 a day) realistic for that location?

Used in

Learn next

Contribution margin

What each extra unit adds towards covering fixed costs.

Fixed vs variable costs

Costs that stay put vs costs that grow with sales.

Payback period

How long until an investment earns back what it cost.

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