Revenue & Sales

Intermediate

Break-Even Revenue

Break-even revenue is fixed costs divided by the contribution-margin ratio — the sales needed to cover all costs.

Formula

R_{be} = \dfrac{FC}{CMR}

Variables

R_{be}Break-even revenue

FCFixed costs

CMRContribution-margin ratio

Example

$60,000 fixed costs, 40% margin: R_be = $150,000

Did You Know?

Below break-even every sale still loses money — the point marks where a business finally starts to profit.

revenue break-even costs

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More in Revenue & Sales

Total Revenue

Total revenue is the selling price multiplied by the number of units sold.

Net Revenue

Net revenue is gross revenue less returns, refunds and discounts — the amount actually recognised.

Average Revenue

Average revenue is total revenue divided by units sold — equal to price per unit in a single-price market.

Marginal Revenue

Marginal revenue is the extra revenue earned from selling one additional unit.

Revenue Growth Rate

The percentage change in revenue from one period to the next.

Monthly Recurring Revenue

Monthly recurring revenue is the number of active subscribers times average revenue per user per month.