Free tool
Break-Even Calculator
How much you need to sell before you make a rupee of profit — and how far sales could fall before you start losing money.
Rent, salaries, insurance, software
Materials, freight, commission
Optional — used for margin of safety
Result
- Contribution per unit
- ₹0
- Contribution margin
- 0%
- Break-even units
- 0
- Break-even revenue
- ₹0
- Margin of safety
- —
- Profit at current volume
- ₹0
Break-even, and why the number moves
Break-even is the volume at which contribution exactly covers fixed costs. Below it you lose money on the month; above it, every additional unit adds its full contribution to profit. The formula is simple:
Break-even units = Fixed costs ÷ (Price − Variable cost per unit)
Price is the strongest lever
Consider a product at ₹1,000 with ₹600 of variable cost and ₹5,00,000 of monthly fixed costs. Contribution is ₹400, so break-even is 1,250 units. Raise the price 10% to ₹1,100 and contribution becomes ₹500 — break-even drops to 1,000 units, a 20% improvement from a 10% change. Cutting variable cost by 10% has a similar effect; cutting fixed costs by 10% only moves break-even by 10%.
Where the model misleads
- Semi-fixed costs — capacity that steps up in blocks. Adding a shift moves fixed costs discontinuously, so there can be two break-even points.
- Mixed products — a single break-even across a range assumes the sales mix holds. Shift the mix towards low-contribution lines and the real break-even rises even though the calculation hasn’t changed.
- Break-even isn’t cash-even — loan principal and capex don’t appear in the P&L but do leave the bank. See the cash runway calculator for that side.
Getting contribution right per product or client is exactly the margin analysis in our monthly reporting pack.
Break-even — common questions
How do you calculate the break-even point?
Break-even units = fixed costs ÷ contribution per unit, where contribution per unit is selling price minus variable cost per unit. Break-even revenue is that unit figure multiplied by the selling price, or fixed costs ÷ contribution margin ratio.
What is contribution margin?
Contribution margin is what each sale contributes towards fixed costs and profit, after the variable costs of making that sale. Expressed per unit it is price minus variable cost; expressed as a ratio it is that figure divided by price.
What counts as a fixed cost versus a variable cost?
Fixed costs don’t move with volume in the short run — rent, salaries, insurance, software. Variable costs move directly with each unit sold — materials, packing, freight, sales commission. Costs that step up in blocks, like an extra shift, are semi-variable and should be treated carefully.
What is the margin of safety?
Margin of safety is how far current sales exceed break-even, shown in value or as a percentage. A 30% margin of safety means sales could fall by 30% before you start making a loss. It’s a far better measure of resilience than the profit figure alone.
How does a price change affect break-even?
Disproportionately. Because a price rise flows almost entirely into contribution, a 5% increase can cut the break-even volume substantially — which is why pricing is usually the highest-leverage lever available, and the least examined.
Serving businesses across India
Which of your products actually makes money?
Most businesses have at least one line that looks fine on revenue and loses money on contribution. Monthly margin reporting finds it.
Delivered within 24 working hours, or next month is on us. 24 working hours from the moment we have your complete data. The clock runs Monday to Saturday and pauses on Sundays and public holidays. Terms