Break-even point: Financial turning point of the company's success

The break-even point is the moment at which a company's total revenue exactly covers its total costs, which means that no profit is made, but also no loss. This metric is crucial for financial planning and analysis as it shows companies how much revenue is needed to reach the break-even point. Understanding the break-even point enables decision makers to optimise pricing strategies, implement cost controls and minimise the risk of financial shortfalls, helping to ensure long-term profitability.