Cost, Profitability, and Break-Even Analysis

Hrishikes Bhattacharya

in Banking Strategy, Credit Appraisal, and Lending Decisions

Second edition

Published in print October 2011 | ISBN: 9780198074106
Published online September 2012 | e-ISBN: 9780199080861 | DOI:
Cost, Profitability, and Break-Even Analysis

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It is important for a banker to make a marginal analysis of the profitability for a deeper understanding of the cost and profit behaviour of a business or a product. This chapter introduces the concept of break-even analysis while dealing with a real problem of an entrepreneur. Using real-life examples, it acquaints the reader with the usage of this important tool in the appraisal of a business, which would also enable him to counsel entrepreneurs, about the operating and financial viability of product(s).

Keywords: entrepreneur; variable cost; fixed cost; marginal cost; marginal analysis; break-even sales; profit–volume ratio; profitability analysis; break-even analysis; business appraisal

Chapter.  9644 words.  Illustrated.

Subjects: Financial Markets

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