https://en.bharatpedia.org/w/index.php?action=history&feed=atom&title=Break-evenBreak-even - Revision history2026-10-21T09:38:39ZRevision history for this page on the wikiMediaWiki 1.43.6https://en.bharatpedia.org/w/index.php?title=Break-even&diff=426151&oldid=prevAjay Kumar: Created a new article2023-09-07T15:08:13Z<p>Created a new article</p>
<p><b>New page</b></p><div>{{Short description|Point of balance at which neither a profit nor a loss is made}}<br />
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'''Break-even''' (or '''break even'''), often abbreviated as '''B/E''' in finance, (sometimes called point of equilibrium) is the point of balance making neither a [[Profit (economics)|profit]] nor a loss. Any number below the break-even point constitutes a loss while any number above it shows a profit. The term originates in [[finance]] but the concept has been applied in other fields.<br />
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==In economics==<br />
{{Main|Break-even (economics)}}<br />
[[File:Cash Flow Model in Project Portfolio Management Simulation SimulTrain(R).jpg|thumb|400px|A simplified cash flow model shows the payback period as the time from the project completion to the breakeven.]]<br />
In [[economics]] and [[business]], specifically [[cost accounting]], the '''break-even point''' ('''BEP''') is the point at which cost or expenses and revenue are equal: there is no net loss or gain, and one has "broken even". A profit or loss has not been made, although [[opportunity cost]]s have been "paid" and capital has received the risk-adjusted, expected return. In other words, it is the point at which the total revenue of a business exceeds its total costs, and the business begins to create wealth instead of consuming it.<ref name='R000000'>{{cite book | last = Levine | first = David | author-link = David K. Levine |author2=Michele Boldrin | title = ''Against Intellectual Monopoly'' | publisher = Cambridge University Press | date = 2008-09-07 | pages = 312 | url = http://www.dklevine.com/general/intellectual/againstfinal.htm | isbn = 978-0-521-87928-6 }}</ref> It is shown graphically as the point where the total revenue and total cost curves meet. In the linear case the break-even point is equal to the fixed costs divided by the [[contribution margin]] per unit.<br />
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The break-even point is achieved when the generated profits match the total costs accumulated until the date of profit generation. Establishing the break-even point helps businesses in setting plans for the levels of production it needs to maintain to be profitable.<ref>{{Cite web|title = BBC - GCSE Bitesize: Breakeven point|url = http://www.bbc.co.uk/schools/gcsebitesize/business/finance/profitabilityrev1.shtml|access-date = 2015-09-08}}</ref><br />
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==In finance==<br />
The accounting method of calculating '''break-even point''' does not include cost of [[working capital]]. The [[financial]] method of calculating break-even, called '''value added break-even analysis''', is used to assess the feasibility of a project. This method not only accounts for all costs, it also includes the [[opportunity cost]]s of the [[Financial capital|capital]] required to develop a project.<ref>[[Richard A. Brealey|Brealey, R.]], [[Stewart Myers|Myers, S.]], Marcus, A., Maynes, E., Mitra, D. 2009. Fundamentals of Corporate Finance. McGraw-Hill Ryerson. USA. pp. 284. {{ISBN|978-0-07-098403-5}}</ref><br />
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==In other fields==<br />
In [[nuclear fusion]] research, the term ''break-even'' refers to a [[fusion energy gain factor]] equal to unity; this is also known as the [[Lawson criterion]]. The notion can also be found in more general phenomena, such as [[percolation]]. In energy, the break-even point is the point where usable energy gotten from a process equals the input energy.<br />
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In [[computer science]], the term (used infrequently) refers to a point in the life cycle of a [[programming language]] where the language can be used to code its own [[compiler]] or [[interpreter (computing)|interpreter]]. This is also called [[Self-hosting (compilers)|self-hosting]].<br />
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In [[medicine]], it is a postulated state when the advances of medicine permit every year an increase of one year or more of the life expectancy ''of the living'', therefore leading to medical immortality,<ref>{{cite book |first1=Ray |last1=Kurzweil<br />
|first2=Terry |last2=Grossman |title=Fantastic Voyage: Live Long Enough to Live For Ever |publisher=Rodale Books |year=2004 |isbn=978-1579549541 |url-access=registration |url=https://archive.org/details/fantasticvoyagel00kurz}}</ref> barring accidental death.<br />
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In [[Association football]], the break-even requirement was adopted by [[UEFA]]. It is known as [[UEFA Financial Fair Play Regulations]]. Its purpose is to prohibit clubs from spending more money on transfers than they earn as businesses, i.e. revenue per each fiscal year excluding donations from sponsors or advertisers.<ref>[https://www.uefa.com/MultimediaFiles/Download/Tech/uefaorg/General/02/56/20/15/2562015_DOWNLOAD.pdf Page 38 (44 in PDF)]</ref><br />
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==References==<br />
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{{DEFAULTSORT:Break even}}<br />
[[Category:Profit]]<br />
[[Category:Pricing]]<br />
[[Category:Management accounting]]</div>Ajay Kumar