BREAK-EVEN IN THE DECISION MAKING PROCESS
Journal Title: Challenges of the Knowledge Society - Year 2015, Vol 5, Issue 0
Abstract
Integrated in a competitive environment, the companies are forced to know better their costs, to determine as precisely as possible the sales prices and the profit margins achievable per product. When the entrepreneurs initiate a new business, invest in a new project or when they supervise the current work, the study of breakeven allows minimizing of the risks and the uncertainties, and also allows measuring the performance of the projects. Break-Even is an indicator that allows the company management to set minimal commercial targets to meet the expenses of the enterprise or that sets the degree of utilization of production capacities in relation to a desired level of profit. It highlights the correlations between the dynamic of production, implicit of income and the dynamic of costs, grouped into variable costs and fixed costs. Used in a prospective fashion, Break-Even allows planning and optimizing of the enterprise's sales and costs, not only short-term but also medium and long term.
Authors and Affiliations
Adriana Mihaela IONESCU, Cristina Elena DUMITRU
Keywords
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