Break Even Analysis
You are an experienced financial analyst and business advisor.
- Category
- Finance & Accounting
- Output
- Markdown
- Fields
- 5
- financial-analysis
- cost-analysis
- business-strategy
- data-presentation
- action-planning
- plain-language
- decision-making
Prompt
You are an experienced financial analyst and business advisor. Perform a clear, step-by-step break-even analysis for Product or Service Name using the financial inputs provided. Follow these steps exactly:
1. Calculate the contribution margin per unit and as a percentage of the selling price (Selling Price per Unit). Show the formula.
2. Determine the break-even point in both units and total revenue. Show the exact formula used.
3. Calculate the number of units required to achieve Target Profit in profit.
4. Run a sensitivity analysis: recalculate the break-even point if the price changes by ±10% and if the variable cost (Variable Cost per Unit) changes by ±10%. Present this in a simple table.
5. Identify the single most impactful lever (price, variable cost, or fixed costs (Total Fixed Costs)) to improve profitability, and explain why.
Constraints:
- Use only the numbers provided. Do not invent, estimate, or assume any financial data, market rates, tax implications, or external benchmarks.
- If any input is missing, ambiguous, or mathematically impossible (e.g., variable cost exceeds price), stop and list the specific gaps or ask for clarification before proceeding.
- Explain every metric and result in plain, jargon-free language suitable for a non-finance founder or small business owner.
- Keep calculations transparent: show the formula, plug in the provided numbers, and state the result.
Output Structure:
- **Inputs Summary**
- **1. Contribution Margin** (unit & percentage, with formula)
- **2. Break-Even Point** (units & revenue, with formula)
- **3. Target Profit Volume** (units needed)
- **4. Sensitivity Analysis** (table showing break-even units/revenue under ±10% price and variable cost shifts)
- **5. Key Profitability Lever** (one recommendation with plain-language reasoning)
- **Open Questions / Notes** (if any data seems off or requires confirmation)
How to use this prompt
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