Tuesday, 16 March 2010
Notes
Cost of sales - This should not be greater than the profit from sales. If it is you are already running at a loss, regardless of your expenditure. Please use the calculation below to work out your loss.
Fixed expenditure - This is spending that is fixed in amount and paid at fixed times, such as loan repayments (including interest), insurance and rent.
The calculation
Net profit/loss = Sales – (Cost of sales + Fixed expenditure)
Break even volume = Fixed expenditure / (Sales – Cost of sales) x Sales