Courses / Short Learning Series
Break-Even & Business Decisions
SL-16 · For leaders
Use contribution thinking to make better commercial decisions. You will separate fixed and variable costs, calculate break-even, target-profit volumes and margin of safety, decide on make-or-buy and special orders using relevant costs, and test plans with scenario and sensitivity analysis.
Who it's for
Business owners, managers and finance professionals who price products, approve deals or plan growth.
What you'll be able to do
- Classify costs as fixed, variable or mixed and calculate contribution and the contribution margin ratio
- Calculate break-even, target-profit volume, margin of safety and operating leverage
- Make make-or-buy, special order and limiting-factor decisions using relevant costs
- Build base, best and worst case scenarios and a sensitivity table to support a commercial decision
Lessons
- 1Fixed costs, variable costs and contributionreading
- 2Break-even and margin of safetyreading
- 3Make-or-buy and special order decisionsreading
- 4Scenario analysis for commercial choicesreading