Traditional Culture Encyclopedia - Traditional stories - What chart directly reflects the relationship between business volume and profit?
What chart directly reflects the relationship between business volume and profit?
Cost-volume-profit analysis is the abbreviation of cost-output (or sales volume)-profit dependence analysis, also known as CVP analysis. It refers to the mathematical accounting model and graphic based on the variable cost calculation model, which reveals the internal law relationship among fixed cost, variable cost, sales volume, unit price, sales volume and profit, and provides the basis for accounting prediction and planning.
Using the principle of analytic geometry to establish a volume-profit relationship diagram in a plane rectangular coordinate system can fully reflect the dependence between cost, business volume and profit. The volume-profit relationship diagram can not only reflect the total level of fixed cost, variable cost, sales volume, sales revenue and profit, but also reflect the unit quantity level of unit price, unit variable cost and unit marginal contribution rate to a certain extent. It also reveals the level of break-even point, poly point, safety margin and safety margin, and describes the relevant scope, the shape and size of loss area and profit area.
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