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Definition of Break-even analysis
An analysis of the level of sales at which a project would make zero profit.
analysis of the level of sales at which the company breaks even.
An analytical technique for studying the relationships between fixed cost, variable cost, and profits. A breakeven chart graphically depicts the nature of breakeven analysis. The breakeven point represents the volume of sales at which total costs equal total revenues (that is, profits equal zero).
A method developed by BARRA, a consulting firm in
A rapid and sharp price decline.
The lease payment at which a party to a prospective lease is indifferent between
The prepayment rate of a MBS coupon that will produce the same CFY as that of
The tax rate at which a party to a prospective transaction is indifferent between entering
Related: Premium payback period.
A rise in a security's price above a resistance level (commonly its previous high price) or drop
The point below which the firm will need either to obtain additional financing
A statistical technique that identifies clusters of stocks whose returns are highly correlated
The representing of accounting information over multiple years as percentages
A method of analysis in which a firm is compared to others that have a desired
The process of analyzing information on companies and bond issues in order to estimate the
A statistical process that links the probability of default to a specified set of financial ratios.
Buying or selling to offset an existing market position.
The risk that the ability of an issuer to make interest and principal payments will change because
A statistical study that examines how the release of information affects prices at a particular time.
Events of default
Contractually specified events that allow lenders to demand immediate repayment of a debt.
A statistical procedure that seeks to explain a certain phenomenon, such as the return on a
Security analysis that seeks to detect misvalued securities by an analysis of the firm's
Group of seven (G7/G-7)
The G-5 countries plus Canada and Italy.
An analysis of returns using total return to assess performance over some investment horizon.
The process of dividing each expense item of a given year by the same expense item in
Industrial revenue bond (IRB)
Bond issued by local government agencies on behalf of corporations.
Evaluation of risky prospects based on the expected value and variance of possible outcomes.
Multiple-discriminant analysis (MDA)
Statistical technique for distinguishing between two groups on the
Performance attribution analysis
The decomposition of a money manager's performance results to explain
Pro forma capital structure analysis
A method of analyzing the impact of alternative capital structure
A statistical technique that can be used to estimate relationships between variables.
A bond issued by a municipality to finance either a project or an enterprise where the issuer
A fund accounting for all revenues from an enterprise financed by a municipal revenue bond.
The use of horizon analysis to project bond total returns under different reinvestment rates
analysis of the effect on a project's profitability due to changes in sales, cost, and so on.
Security analysis that seeks to detect and interpret patterns in past security prices.
Total sales and other revenue for the period shown. Known as "turnover" in the UK.
The process of dividing each expense item in the income statement of a given year by net
NET SALES (revenue)
The amount sold after customersâ€™ returns, sales discounts, and other allowances are taken away from
A financial analysis technique that relates key amounts on the income statement and balance sheet to a 100 percent or base figure for the present and previous year.
The point at which total costs equal total revenue, i.e. where there is neither a profit nor a loss.
Costâ€“volumeâ€“profit analysis (CVP)
A method for understanding the relationship between revenue, cost and sales volume.
A method of analysing financial reports to interpret trends and make comparisons by using ratios â€“ two numbers, with one generally expressed as a percentage of the other.
Income earned from the sale of goods and services.
An approach to understanding how changes in one variable of costâ€“volumeâ€“profit analysis are affected by changes in the other variables.
A method of budgetary control that compares actual performance against plan, investigates the causes of the variance and takes corrective action to ensure that targets are achieved.
A method of relating numbers from the various financial statements to one another in order to get meaningful information for comparison.
Amounts earned by the company from the sale of merchandise or services; often used interchangeably with the term sales.
Money that has been paid by customers for work yet to be done or goods yet to be provided.
The annual sales volume level at which total contribution
capital investment analysis
Refers to various techniques and procedures
Operating expenses that vary in proportion to
The process of using financial ratios, calculated from key accounts
the process of detailing the various repetitive actions that are performed in making a product or
a graph that depicts the relationships among revenues, variable costs, fixed costs, and profits (or losses)
break-even point (BEP)
the level of activity, in units or dollars, at which total revenues equal total costs
an analytical technique that uses statistical
cost-benefit analysis the analytical process of comparing the
relative costs and benefits that result from a specific course
cost driver analysis
the process of investigating, quantifying,
a process of evaluating changes that
the revenue resulting from an additional contemplated sale
least squares regression analysis
a statistical technique that investigates the association between dependent and independent variables; it determines the line of "best fit" for a set of observations by minimizing the sum of the squares
a method of ranking the causes of variation
a cost incurred to improve quality by preventing
a responsibility center for which a manager is accountable only for the generation of revenues and has no control over setting selling prices, or budgeting or incurring costs
a process of determining the amount of change that must occur in a variable before a different decision would be made
the process of categorizing the nature (favorable or unfavorable) of the differences between standard and actual costs and determining the reasons for those differences
Statistical analysis techniques that quantify the
The sales level at which a company, division, or product line makes a
The 80:20 ratio that states that 20% of the variables included in an
An inflow of cash, accounts receivable, or barter from a customer in exchange
A payment from a customer that cannot yet be recognized as earned
Procedure to determine the likelihood a customer will pay its bills.
Project analysis given a particular combination of assumptions.
analysis of the effects of changes in sales, costs, and so on, on project profitability.
Estimation of the probabilities of different possible outcomes, e.g., from an investment project.
The calculation and comparison of the costs and benefits of a policy or project.
Internal Revenue Code
Refers to all federal tax laws as a group.
Internal Revenue Service
A federal agency empowered by Congress to interpret and enforce tax-related laws.
Revenue recognized on a nonexistent sale or service transaction.
Revenue recognized for a confirmed sale or service transaction in a period
Realizable Revenue A revenue transaction where assets received in exchange for goods and
services are readily convertible into known amounts of cash or claims to cash.
A revenue transaction where goods and services are exchanged for cash or
The act of recording revenue in the financial statements. Revenue should
Sales Revenue Revenue recognized from the sales of products as opposed to the provision of
Revenue recognized from the provision of services as opposed to the sale of
The examination of failure incidents to identify components
This is a term used to describe a point at which revenues equal costs.
A deal breaker is a significant issue relating to the proposed financing between the prospective investor and the entrepreneur that needs to be resolved in order to close the deal.
Financial Trend Analysis
Process of analyzing financial statements of a company for any continuing relationship.
fixed expenses (costs)
Expenses or costs that remain the same in amount,
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