# Break-even

> Break-even is the revenue level at which a company covers all its costs and the result is zero. Below it, it loses money; above it, every sale adds profit.

Updated: 2026-09-03 · Author: Santiago Viglione (Fibady) · https://www.fibady.com/en/glossary/break-even

Break-even is the revenue level at which a company covers all its costs, fixed and variable, and the result is zero. Below it the company loses money; above it, every sale generates profit. It is also called the breakeven point or profitability threshold.

## How it is calculated

Break-even (in revenue) = Fixed costs ÷ Contribution margin %. In units: Fixed costs ÷ (Unit price − Unit variable cost). In cash terms, the same logic applies to fixed payments and net receipts: the month in which net burn reaches zero.

## Example with numbers

Monthly fixed costs 200,000; contribution margin 50%. Break-even = 200,000 ÷ 0.50 = 400,000 of revenue a month. With current revenue of 320,000 the company loses 40,000 a month; growing 4% monthly, it reaches break-even in about 6 months.

## How Fibady does it

Contribution margin and fixed costs come from the consolidated P&L with the group's level structure, and the forecast by area projects the month in which revenue crosses break-even. The AI agent explains which lines bring it closer or push it away; the calculation is done by the model, not the agent.

## Frequently asked questions

### Is break-even the same as the breakeven point?

Yes. Break-even, breakeven point and profitability threshold name the same calculation; the choice is a matter of style.

### How often is it calculated?

Whenever fixed costs or margin change: at least with the annual budget and at each forecast review.

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