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Hey Reader,

The Break Even point is a dream destination for many companies.

It’s where your revenue finally matches your costs, and profitability is on the horizon.

Today, we're going to learn how to calculate your Break-even point and build a beautiful dynamic dashboard in Excel.

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There are a few ways to define this:

1️⃣ The point where your current month's revenue matches your current month's expenses.

2️⃣ The number of units you must sell in order to break even.

3️⃣ The amount of $$ sales you must generate to break even.

4️⃣ The amount of profit you must generate to recoup all costs since inception.

Each of these is based on the same question - when do you start to match your expenses with sales?

For this post, we’ll focus on the amount of units that you need to generate in order to break even.

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Businesses typically have what’s known as Fixed Costs, and Variables Costs.

To calculate break even, the formula is fairly simple:
Break-Even Point = Fixed Cost / (Sales price - variable cost)

Here's an example:

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Start by creating a table showcasing your total sales and total costs across different levels of units produced.

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Add an Area chart for Total Costs and Total Sales as such.

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Add a new series called “shading” equal to the minimum of sales and costs.

Make this white to hide the unwanted shading from your chart.

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Add a scatterplot to the X and Y axis where break-even takes place.

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Replace the scatterplot with a marker, and choose a custom picture.
Insert an arrow.

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Add data labels to pull from a cell, and use a custom formula to pull in the break-even units and text.

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Building this dashboard was a lot of fun for me...and I learned a few new things along the way!

Have you ever built a break-even dashboard?

Let me know your experience by replying to this email.

Till next time

Josh
Your CFO Guy