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Break-Even Analysis Unlocked: How to Understand the Profit and Loss Statement

Find out how to predict business profitability, the break-even point and the margin of safety with powerful financial tools.

  • Duration

    2 weeks
  • Weekly study

    5 hours
  • 100% online

    How it works
  • Included in an ExpertTrack

    Course 3 of 5
  • Get full ExpertTrack access

    $39/monthFind out more

How do you know when a business will become profitable? And can you predict business risk and potential losses? Every successful company runs different financial analyses before making investment decisions. Break-even analysis helps these companies to ensure their survival in the short term.

On this course, you’ll have the opportunity to cover everything that a comprehensive break-even analysis entails. You’ll have the chance to learn how to understand the different classifications of cost and how they relate to business stability.

You’ll also find out how to evaluate the feasibility of business ideas and their potential for success by calculating and applying the break-even point, or BEP.

Learn how to read a profit and loss statement

Want to know how to analyse a profit and loss (P&L)? This course will teach you what you need to know about the P&L statement – from sources of income and sales and seasonality to the all-important bottom line: net profitability.

Find out how to calculate margin of safety

What is the margin of safety? Simply put, it’s the amount that sales can fall before the break-even point is reached and the business makes no profit. This calculation also tells a business how many sales it has made over its BEP.

This course explores the principles of margin of safety and profit, and look at the output for required profit.

You’ll also carry out exercises on break-even analysis using formulas and templates, and be introduced to operational gearing (or operational leverage) – the relationship between a firm’s fixed and variable costs.

What topics will you cover?

  • Identify the definitions of cost and their relationship with business sustainability
  • Gain an understanding of break-even analysis and its method
  • Learn how to calculate the break-even point
  • Get introduced to the concept of margin of safety and its importance
  • Gain an understanding of operational gearing and what this means for a business

Prove you're job ready

Highlight the new, job-relevant skills you’ve gained and supplement existing qualifications with a hard-earned, industry-specific digital certificate – plus one for every course within your ExpertTrack.

  • Learn the latest in your chosen industry or subject.
  • Complete each course and pass assessments.
  • Receive certificates validated by the educating organisation.
  • Impress employers with learning outcomes you can add to your CV.
  • Make your career dreams a reality.

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Learning on this course

On every step of the course you can meet other learners, share your ideas and join in with active discussions in the comments.

What will you achieve?

By the end of the course, you‘ll be able to...

  • Calculate and apply break-even point, margin of safety and profit
  • Describe contribution and explain its importance
  • Evaluate the effect of operational gearing on risk and profit
  • Explain the difference between fixed, variable and semi variable costs
  • Explore the concept of operational gearing and explain its importance

Who is the course for?

This ExpertTrack is designed for anyone looking to build their financial data analysis and interested in using data for business decision making.

It will be of particular interest to people in senior management and leadership roles who lack an accounting background, especially if you wish to learn the skills to help you make better decisions and advance your career.

Who developed the course?

Coventry University

Coventry secured 5 QS Stars for Teaching and Online Learning in the QS World University Ranking 2020 and has received No. 1 in the world for Massive Open Online Courses in MoocLab’s World University Ranking 2021.

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  • Location


About this ExpertTrack

Unlock business potential with balanced scorecards, balance sheets, ratio analysis and other strategic financial analysis tools.

Start learning today - free 7-day trial

After your free trial you can:

  • Pay $39 per month to keep learning online
  • Have complete control over your subscription; you can cancel any time
  • Work at your own pace and set your own deadlines at every stage
  • Only pay while you’re learning; the subscription will cancel automatically when you finish
  • Complete online assessments to test your knowledge and prove your skills
  • Earn digital course certificates and a final award that you can share online, with potential employers, and your professional network
  • Keep access to the content of courses you complete even after your subscription ends

Learning on FutureLearn

Your learning, your rules

  • Courses are split into weeks, activities, and steps to help you keep track of your learning
  • Learn through a mix of bite-sized videos, long- and short-form articles, audio, and practical activities
  • Stay motivated by using the Progress page to keep track of your step completion and assessment scores

Join a global classroom

  • Experience the power of social learning, and get inspired by an international network of learners
  • Share ideas with your peers and course educators on every step of the course
  • Join the conversation by reading, @ing, liking, bookmarking, and replying to comments from others

Map your progress

  • As you work through the course, use notifications and the Progress page to guide your learning
  • Whenever you’re ready, mark each step as complete, you’re in control
  • Complete 90% of course steps and all of the assessments to earn your certificate

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