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Break-even point with several products and P&L

Find out how much the business needs to sell, in revenue and in units of each product, to pay all costs and start making a profit. Enter fixed costs and products with price, cost, commission and volume; see the break-even chart, the profit potential and a simplified income statement with gross, EBITDA, EBIT and net margins.

Educational simulation. Not investment advice. Results are estimates based on the data you enter and do not replace advice from a qualified professional.

Reviewed on Oct 31, 2026

Example values for a clothing store. Add or remove rows to match your business.

Monthly fixed costs
Total fixed costs—
Products and sales

Cost: goods, raw materials or supplies for each unit. Other costs: variable per unit, such as shipping, packaging, gifts. Commission: sales staff variable pay, as % of the price.

Percentages of sales
Other income statement items

Use the effective income tax rate on the business profit. If the profit is taxed on the owners’ personal returns, leave 0% to see the pre-tax result.

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—Break-even point: monthly revenue
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Where loss turns into profit

Revenue and total cost at each sales level, keeping today’s product mix. Where the lines cross is the break-even point: loss to the left, profit to the right.

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Profit potential by sales volume

Monthly net profit if sales of every product fall or rise in the same proportion.

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How many units of each product to sell

Units per month today, at break-even and to reach the target net profit.

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How much each product helps pay the costs

Each product’s monthly contribution margin: what is left from sales after costs, taxes, fees and commissions.

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Break-even by product

Business margins

Share of net revenue left at each step of the monthly income statement.

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Simplified monthly income statement

The summary lists your inputs, results, formulas, assumptions and sources. The full report also includes the charts and interpretations, in color. In the print dialog, choose Save as PDF.

Method, assumptions and sources

Formulas

Product contribution margin = price × (1 − sales taxes − fees − commission) − cost − other variable costs
Break-even = (fixed costs + depreciation + interest) ÷ average contribution margin (%); cash break-even excludes depreciation
Sales for target profit = (fixed costs + depreciation + interest + target profit ÷ (1 − income tax)) ÷ average margin
P&L: net revenue − COGS = gross profit; − variable and fixed expenses = EBITDA; − depreciation = EBIT; − interest = pre-tax profit; − income tax = net profit

Assumptions and limits

  • The current product mix is kept. Inventory, payment terms, seasonality and step changes in fixed costs are not considered.
  • Simplified income statement structure; margins are over net revenue.
  • Break-even assumes constant prices, costs and product mix. The P&L is a simplified management report and does not replace financial statements prepared by an accountant.

Official sources and references

Frequently asked questions

What is the break-even point?

The monthly sales level at which the contribution margin exactly pays fixed costs, depreciation and interest: zero profit. Below it the business loses money; above it, each extra sale adds profit equal to its contribution margin.

How is break-even calculated with several products?

Divide fixed costs by the average contribution margin weighted by each product’s share of sales. The calculation assumes the product mix stays the same; selling more of high-margin products lowers break-even.

How do I read the default example?

The clothing store has $17,350 of fixed costs plus $400 of depreciation and $250 of interest, and an average contribution margin of 51.3%. Break-even is $35,071 a month; with $53,380 in sales the store is 34% above it and makes $7,424 of net profit after 21% income tax.

What is the margin of safety?

How much sales can drop before the business reaches break-even: (current sales − break-even) ÷ current sales. Below 10% is thin; above 25% leaves a comfortable cushion for slow months.

What is the difference between cash and accounting break-even?

Accounting break-even includes depreciation; cash break-even leaves it out because it does not leave the bank account in the month. Between the two, the business pays its bills but does not save to replace equipment.

Where do I get the numbers?

Fixed costs come from monthly bills and bank statements; unit costs from purchase invoices; tax and fee percentages from your accountant and card or marketplace statements. Use an average of several months if sales vary a lot.

Does the P&L replace my financial statements?

No. It is a simplified management report for decisions on price, mix and targets. Official statements and tax returns should be prepared by an accountant.

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How to calculate your break-even point

The break-even point is the level of sales at which the business pays all its costs and makes zero profit. Below it you lose money every month; above it, each extra sale adds profit. Knowing it tells you how much you must sell, how much room you have before a loss and how sensitive the business is to a slow month.

The formula

Break-even sales = fixed costs ÷ contribution margin %

Contribution margin is the price minus everything that varies with each sale: cost of goods, sales taxes included in the price, card fees and commissions. With several products, use the average margin weighted by each product’s share of sales.

Example

ItemValue
Fixed costs + depreciation + interest$18,000 a month
Average contribution margin45%
Break-even sales$40,000 a month
Current sales$50,000
Margin of safety20%

Cash and accounting break-even

Accounting break-even includes depreciation, the gradual loss of value of equipment. Cash break-even leaves it out, because depreciation does not leave the bank account in the month. Selling between the two keeps the bills paid but does not set money aside to replace equipment.

The income statement

The simplified P&L shows how sales turn into profit: net revenue, gross profit, EBITDA, EBIT, pre-tax profit and net profit. Each margin divided by net revenue shows where money is lost. A falling gross margin points to prices or purchasing; a falling EBITDA margin points to overheads.