Plain-language questions
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KPI · Finance
Break-even point: formula and example.
The break-even point is the revenue or number of units sold at which total income exactly equals total costs. Below that point the business makes a loss, above it a profit. You calculate it by dividing fixed costs by the contribution margin ratio: the share of each euro of revenue left after variable costs.
Break-even point formula
Fixed costs ÷ contribution margin ratio, where contribution margin ratio = (revenue − variable costs) ÷ revenue
Worked example
In 2025 Acme Groothandel had €2,880,000 of fixed costs (staff, other operating expenses and depreciation). Variable costs, mainly purchases, were 70% of revenue, so the contribution margin ratio is 30%. The break-even point is €2,880,000 ÷ 0.30 = €9,600,000 of revenue. With revenue of €12,000,000, Acme was €2,400,000 above break-even.
Fictitious figures for Acme Groothandel, a sample wholesaler.
How to read this KPI
The lower the break-even point relative to actual revenue, the more room there is before the business makes a loss. That room is the margin of safety; in the example (€12,000,000 − €9,600,000) ÷ €12,000,000 = 20%. Recalculate the break-even point when fixed costs change, such as extra staff or a larger warehouse, or when the margin shifts.
Pitfalls with break-even point
- Treating every cost as either fixed or variable, when many costs are partly both, such as transport and agency staff.
- Forgetting interest: including financing costs, the break-even point is higher than the operating break-even point.
- Using an average contribution margin while the product mix shifts towards lower-margin products.
SQL & DAX
Calculating break-even point in SQL and DAX
Two examples on a fictitious data warehouse for Acme Groothandel: a PostgreSQL query and a measure for a Power BI model. Adjust table and column names to your own model.
WITH pl AS (
SELECT SUM(amount) FILTER (WHERE account_group = 'revenue') AS revenue,
SUM(amount) FILTER (WHERE account_group = 'cogs') AS variable_costs,
SUM(amount) FILTER (WHERE account_group IN ('personnel', 'other_opex', 'depreciation')) AS fixed_costs
FROM gl_entries
WHERE entry_date >= date_trunc('year', current_date) - interval '1 year'
AND entry_date < date_trunc('year', current_date)
)
SELECT revenue,
fixed_costs,
ROUND((revenue - variable_costs) / NULLIF(revenue, 0), 3) AS contribution_margin_ratio,
ROUND(fixed_costs / NULLIF((revenue - variable_costs) / NULLIF(revenue, 0), 0), 0) AS break_even_revenue
FROM pl;Contribution Margin % =
VAR Revenue = CALCULATE(SUM(GL[Amount]), GL[AccountGroup] = "revenue")
RETURN DIVIDE(Revenue - CALCULATE(SUM(GL[Amount]), GL[AccountGroup] = "cogs"), Revenue)
Break-even Revenue =
DIVIDE(CALCULATE(SUM(GL[Amount]), GL[AccountGroup] IN {"personnel", "other_opex", "depreciation"}), [Contribution Margin %])In ENABLE
Tracking this KPI in ENABLE
In your Power BI dashboard
Define the KPI as a measure in your Power BI model and show it in the portal, with "Last refreshed" next to it. Access profiles and optional row-level security decide who sees which figures.
Custom dashboards (pilot)
Add the KPI as a tile to a custom dashboard, compared with last year. The Dashboard Builder is a pilot and can be switched on per client.
Monthly targets
With the built-in Targets app you set a target for the KPI per month, so you see actuals and target side by side.
FAQ
Frequently asked questions
How do you calculate the break-even point?
Divide fixed costs by the contribution margin as a percentage of revenue. With €2,880,000 of fixed costs and a 30% contribution margin, the break-even point is €9,600,000 of revenue. In units, divide fixed costs by the contribution margin per unit.
What is the difference between the break-even point and the margin of safety?
The break-even point is the revenue at which you break even, the margin of safety is how far revenue can fall before you reach that point. With €12,000,000 of revenue and a break-even point of €9,600,000, the margin of safety is €2,400,000, or 20%.
What is contribution margin?
Contribution margin is the part of revenue left after variable costs, which goes towards covering fixed costs. For a wholesaler it is close to gross margin, because purchases are the largest variable cost.
Further reading
- KPI libraryFinancial KPIs: formulas and examplesFinancial KPIs show how profitable, liquid and solvent an organisation is. The data usually comes from your accounting package or ERP: general ledger entries, invoices and open items.Read more
- ResourcesHow to build a KPI dashboard: steps and examplesA KPI dashboard is an overview of the key figures you use to steer towards your goals, such as revenue, margin, on-time delivery or absenteeism. A good KPI dashboard does not start with the software, but with the decisions it needs to support. You then choose a limited number of KPIs, define them, sketch the dashboard and only then build it.Read more
- SolutionPower BI dashboard portal: share dashboards securelyShare your Power BI dashboards securely in your own portal, with role-based access.Read more
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