Key Management Ratios (Financial Times Series) by Ciaran Walsh
Author:Ciaran Walsh
Language: eng
Format: mobi
ISBN: 9780273742128
Publisher: Pearson Education Limited
Published: 2010-04-07T14:00:00+00:00
Break-even (B/E) Chart
In figure 15.7, the three separate charts of figure 15.6 have been combined to show how the three sections come together. First we see the band of fixed costs at the base of the chart. Positioned above this is the variable costs wedge. Along the upper boundary of this wedge is the total cost line. Finally, the total revenue line is shown rising from the zero revenue at zero output up through the two areas of cost until it breaks through the total cost line about 50 per cent of capacity. This is the break-even point. To the left of it lies loss, to the right profit.
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