返回列表 发帖

Operating Net Income Break even

I understand it like this.


Essentially operating break even is the fixed costs divided by the profit per unit, whereas the net income is fixed plus interest divided by profit per unit. In other words net income break even included financing costs and operating doesn't therefore NI break even is the only one affected by leverage, correct?

NI breakeven is affected by FINANCIAL leverage whereas operating breakeven is not(important distinction there).

Operating breakeven is affected by operating leverage which is the amount of fixed costs you use.

Total leverage = Operating leverage * financial leverage

TOP

Operating Breakeven = F / P - V

It ignores the amount of leverage a firm is using.

NO EXCUSES



Edited 1 time(s). Last edit at Friday, May 28, 2010 at 03:09PM by bpdulog.

TOP

jmac01 Wrote:
-------------------------------------------------------
> p+v?

Should be P-V, sorry about that.

NO EXCUSES

TOP

Ok, so when we go to calc break even, do we or do we not include interest?

TOP

返回列表