Breakeven Meaning: Definition, Examples, and Translations
๐ฐ
breakeven
[หbreษชkหiหvษn ]
Definition
finance term
Breakeven refers to the point at which total revenues equal total costs, resulting in neither profit nor loss. It's a critical concept in various financial analyses, particularly for businesses to determine the minimum performance required to avoid losing money. This analysis is essential for pricing strategies, budgeting, and forecasting. Businesses often use breakeven analysis to evaluate the feasibility of new projects or to understand the impact of changes in cost or pricing.
Synonyms
break-even point, no profit no loss.
Examples of usage
- We need to calculate our breakeven point for the new product.
- The breakeven analysis showed we needed to sell 500 units.
- Achieving breakeven is crucial for startups.
Translations
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Interesting Facts
Finance
- Breakeven analysis helps businesses determine the minimum sales required to avoid losses.
- Variable and fixed costs play key roles in determining the breakeven point for a company.
- Investors often look for companies that can achieve breakeven quickly as it indicates financial health.
Pop Culture
- Movies and shows about stock trading often mention breakeven points when discussing investment strategies.
- Video games featuring finance simulations, such as 'RollerCoaster Tycoon', utilize breakeven analysis for players to manage their parks successfully.
- The term has appeared in songs to symbolize finding balance in life amidst risks and rewards.
Psychology
- Understanding breakeven can influence decision-making in personal finance, prompting people to weigh their gains and losses carefully.
- People may experience a sense of relief or anxiety when they reach a breakeven point in financial investments.
- The concept of breakeven can also apply to relationships, where individuals assess emotional investment and outcomes.
Technology
- In software development, breakeven analysis is used to determine when a project starts generating profit, influencing budget planning.
- Startups often track their path to breakeven to showcase growth potential to investors and secure funding.
- Breakeven metrics are essential in e-commerce and app development as businesses aim to recoup costs from marketing and operating expenses.
Origin of 'breakeven'
Main points about word origin
- The term 'breakeven' originated from the combination of 'break', meaning to reach a point, and 'even', meaning equal or level.
- It was first widely used in the business context during the 1930s as companies started focusing more on financial stability.
- In gambling, the phrase was used to indicate returning to the starting amount after winning and losing.
The term 'breakeven' emerged in the financial lexicon during the 20th century, representing a significant concept in economics and business. It combines 'break' and 'even,' where 'break' signifies the cessation of a certain condition and 'even' implies an equality or balance. Originally associated with financial transactions and accounting, it gained popularity as businesses sought clearer analyses of their operating thresholds. As economies evolved, the breakeven point became a standard metric used in various industries to assess the viability and sustainability of operations, reflecting broader economic conditions and consumer behavior.