The modern face of brutal competition on the market is a very relevant trend analysis of break-even in each entity.Today, the company break-even analysis is a very important control mechanism.It is used for a correct assessment of the financial situation prevailing at the plant.It includes measures to monitor financial performance, and to develop a set of measures aimed at the development of the company.In other words, in our time, break-even analysis is the prerequisite and the main driving force in the economic development of the industrial enterprise.On the basis of its economic strategy produced stability and growth, to successfully exist both on domestic and on foreign markets.
In my practice, break-even analysis is based on a short-term resource planning.It is a research, analysis and a plan of acquisition of each unit of resources.This is done in order to know the potential benefits.And in the future - to produce and sell more of their own production.
industrial activities without the formation of profit and loss is called break-even.The resulting revenue in this type of farming is first of all necessary to cover the costs, and only then each unit of product sold is profitable.Determining the difference between the total sales volume of products and break even is called the zone of profit.The higher the profit zone in the enterprise, the stronger financial position.
to study the dependence of the effect of the volume of production, the amount of fixed costs, variable costs amount to profit and break-even analysis came up with production.
It is very necessary and expedient, not only for the correct financial management of the enterprise, but also:
-with modernization of production facilities, or when creating a new entity;
-for development of marketing strategies in the area of pricing policy;
-for the development of new solutions related to the implementation of the existing production of a new commercial product or remove the old product line to the process;
-with a change in output;
main aspect of break-even analysis is to identify the point of equilibrium.In other words, is to find this volume of sales, in which the proceeds from the sales will be equal to the sum of all costs incurred.The increase of the sales volume will bring further gains and a reduction - will lead to losses and financial ruin.
break-even analysis of the enterprise includes several stages
-On the first stage are assessed and investigated the strengths and weaknesses of a business entity in terms of foreign and domestic policy.Minimizes all possible costs, depending on the technical, manufacturing of equipment and personnel.The activity of competitors, the percentage of the sales market, now controlled.Taking into account consumer preferences and various other components.
-On the second stage the likely forecast about the impact of changing prices on the cost of production factors.The dynamics of the statistical indicators for the last period.We discuss the measures with an adverse price changes.
- The third stage is calculated production costs.Planned volume of work in progress.This includes all fixed and variable costs.Identify needs and the planned volume of production in working capital and fixed assets.Planned corresponding investments.
-On the fourth stage the breakeven point.Moreover, the organization of the production process, implying the release of several types of products, be sure to take into account the different prices according to the nomenclature, the different variable costs and the possibility of covering a different fraction of the cost of the mixed volume.
-On the fifth and final stage, the final financial plan based on changing prices and the volume of production calculated on the basis of the break-even point.
