Free tool · Business finance
Break-Even Calculator
Find break-even units and sales, P/V ratio, margin of safety and the sales you need for a target profit
- Free
- No signup
- Indian rules
Price and costs
· before GSTSales plan
Good to know
- Contribution is what each sale leaves after its variable cost. It first pays the fixed costs, then becomes profit.
- The P/V ratio is contribution as a share of sales. A higher P/V ratio means each extra rupee of sales adds more profit.
- Margin of safety is how far sales can fall before you stop making a profit. The bigger it is, the safer the plan.
- Cash break-even leaves out depreciation, which is a cost but not a cash payment, so it shows the sales needed to cover cash outgoings.
- Enter prices and costs before GST. The GST you collect is paid on to the government and is not your sales.
Results
Break-even point
1,000 units
Sales of ₹5,00,000 cover all fixed costs of ₹2,00,000
Contribution per unit
₹200
₹500 − ₹300
P/V ratio
40%
contribution ÷ sales
Margin of safety
41.18%
700 units · ₹3,50,000
Profit at expected sales
₹1,40,000
on sales of ₹8,50,000
Fixed costs ÷ contribution per unit = ₹2,00,000 ÷ ₹200 = 1,000
Fixed costs ÷ P/V ratio = ₹2,00,000 ÷ 40% = ₹5,00,000
(Fixed costs − non-cash costs) ÷ contribution per unit = (₹2,00,000 − ₹40,000) ÷ ₹200 = 800
Expected sales − break-even sales = ₹8,50,000 − ₹5,00,000. Check: profit ÷ P/V ratio = ₹1,40,000 ÷ 40% = ₹3,50,000
(Fixed costs + target profit) ÷ contribution per unit = (₹2,00,000 + ₹1,00,000) ÷ ₹200 = 1,500, or sales of ₹7,50,000
Based on the marginal costing formulas in the ICAI Intermediate study material (Cost and Management Accounting). It assumes one product (or a steady sales mix), a constant price and variable cost per unit, and fixed costs that do not change within the range of sales shown.
How it works
What this tool does.
Calculate contribution per unit, the P/V ratio, break-even point in units and rupees, cash break-even, margin of safety and the units needed for a target profit, using the marginal costing formulas in the ICAI study material.
Enter the selling price and variable cost per unit, both before GST, and the fixed costs for a period such as a month or a year. Optionally enter how much of the fixed costs is depreciation or other non-cash cost. Add the sales you expect and the profit you want. The calculator works out the contribution each unit makes, the P/V ratio, the break-even point in units and in sales value, the cash break-even point, your margin of safety and the units and sales needed for the target profit. A small chart shows where the sales line crosses the total cost line, and each figure is shown with its working.
Rules and dates last reviewed: October 2026
Break-Even Calculator formula
Contribution per unit = selling price − variable cost per unit. P/V ratio = contribution ÷ sales × 100. Break-even point (units) = fixed costs ÷ contribution per unit. Break-even point (₹) = fixed costs ÷ P/V ratio. Cash break-even (units) = cash fixed costs ÷ contribution per unit. Margin of safety = expected sales − break-even sales = profit ÷ P/V ratio. Units for a target profit = (fixed costs + target profit) ÷ contribution per unit.
Worked example
A Nashik maker of steel water bottles sells them at ₹500 each before GST. Variable cost is ₹300 a bottle. Fixed costs are ₹2,00,000 a month, including ₹40,000 depreciation. It expects to sell 1,700 bottles a month and wants a profit of ₹1,00,000 a month.
- Contribution per bottle = ₹500 − ₹300 = ₹200
- P/V ratio = ₹200 ÷ ₹500 = 40%
- Break-even point = ₹2,00,000 ÷ ₹200 = 1,000 bottles, or ₹2,00,000 ÷ 40% = ₹5,00,000 of sales
- Cash break-even = (₹2,00,000 − ₹40,000) ÷ ₹200 = 800 bottles
- Margin of safety = 1,700 − 1,000 = 700 bottles (41.18% of expected sales), worth ₹3,50,000
- Profit at 1,700 bottles = 700 × ₹200 = ₹1,40,000. Check: ₹3,50,000 × 40% = ₹1,40,000
- Bottles for ₹1,00,000 profit = (₹2,00,000 + ₹1,00,000) ÷ ₹200 = 1,500, or ₹7,50,000 of sales
The business breaks even at 1,000 bottles (₹5,00,000) a month. At 1,700 bottles it earns ₹1,40,000, and sales could fall by 700 bottles before it makes a loss.
Sleet Accounting
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Questions
Break-Even Calculator, answered.
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What is the formula for break-even point?
Break-even point in units = fixed costs ÷ contribution per unit, where contribution per unit is the selling price less the variable cost per unit. In sales value it is fixed costs ÷ P/V ratio. With fixed costs of ₹2,00,000 and a contribution of ₹200 a unit, you break even at 1,000 units.
What is the P/V ratio?
The profit-volume ratio is contribution as a percentage of sales: (selling price − variable cost) ÷ selling price × 100. It tells you how much of each rupee of sales is left to pay fixed costs and then add to profit. A product selling at ₹500 with a ₹300 variable cost has a P/V ratio of 40%.
What is margin of safety?
It is how far your sales are above break-even: expected or actual sales less break-even sales, in units, rupees or as a percentage of sales. It can also be worked out as profit ÷ P/V ratio. A larger margin of safety means sales can fall further before you make a loss.
What is cash break-even point?
The break-even point worked out with only the fixed costs paid in cash. Depreciation and other non-cash costs are left out, so cash break-even = cash fixed costs ÷ contribution per unit. It shows the sales needed to cover the money actually going out.
How many units must I sell for a target profit?
Divide fixed costs plus the target profit by the contribution per unit. With fixed costs of ₹2,00,000, a target profit of ₹1,00,000 and a contribution of ₹200, you need to sell 1,500 units, or ₹7,50,000 of sales at a 40% P/V ratio.
Should I include GST in the selling price?
No. Use the price and costs before GST. The GST you collect on sales is paid on to the government, and if you claim input tax credit the GST on purchases is not a cost either, so including GST would overstate both sales and costs.
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