What basic work should be done first in the practice of profit risk prediction by break-even analysis? What impact does this work have on the forecast?

Break-even analysis is a mathematical analysis method to predict profits, control costs and judge operating conditions by comprehensively analyzing the relationship between product business volume (output or sales volume), cost and profit. Therefore, it is necessary to make a comprehensive analysis of the mutual constraints between the above factors.

Break-even point (sales) = fixed cost ÷ unit measurement contribution difference

Enterprise profit is the balance of sales revenue MINUS cost; Sales revenue is the product of sales volume and unit price; Product cost includes factory cost and sales expense in the total cost, and it is divided into fixed cost and variable cost.

Extended data:

Break-even analysis, also known as break-even point analysis or cost-volume-profit analysis, is a mathematical analysis method used to predict profits, control costs and judge business volume (output or sales volume), product costs and profits on the basis of comprehensive analysis of operating conditions.

Generally speaking, revenue = cost+profit, if profit is zero, all revenue = = fixed cost+variable cost, cost and revenue = sales volume × price, variable cost = unit variable cost × sales volume, so sales volume = fixed cost+unit variable cost × price sales volume.

Baidu Encyclopedia-breakeven analysis