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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.

490 enrolled on this course

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

490 enrolled on this course

  • 2 weeks

  • 5 hours per week

  • Digital certificate when eligible

  • Intermediate level

Find out more about how to join this course

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.


  • Week 1

    Cost, profit and breaking even

    • Getting started

      Welcome to Break-Even Analysis. Get an introduction to the topics from our course leader and find out what we'll cover this week.

    • Introducing cost

      Let's begin our learning journey by introducing the different types of cost and exploring how they influence decision-making in business.

    • Exploring the concept of break-even

      In this section we look at what break-even means and how it is calculated. You also get to test your skills in calculating break-even point with a practical example.

    • Summary and reflection

      Let's take a moment to look back at this week and find out what will be coming up next week.

  • Week 2

    Operational gearing

    • Welcome to Week 2

      Welcome to the second week of Break-Even Analysis. We'll now introduce margin of safety, as well as the concept and effect of operational gearing.

    • Margin of safety and profit

      How do companies work out how much money they need to make before they become unprofitable? We explore the concept of margin of safety in the next few steps.

    • Introducing operational gearing

      In this activity, we introduce operational gearing, evaluate different cost structures and explain the limitations of marginal costing.

    • Summary and reflection

      As we bring this short course to a close, you now have an opportunity to consider the various topics of break-even analysis we have covered and look ahead to what's next.

When would you like to start?

Start straight away and join a global classroom of learners. If the course hasn’t started yet you’ll see the future date listed below.

  • Available now

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 course 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.

You can enhance your learning experience by following related courses, designed by Coventry University:

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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Ways to learn

Choose the best way to learn for you!

Buy this course

$79/one-off payment

Fulfill your current learning need

  • Access to this course
  • Learn at your own pace
  • Discuss your learning in comments
  • Tests to boost your learning
  • Printed and digital certificate when you’re eligible

Subscribe & save

$349.99 for one year

Automatically renews

Develop skills to further your career

  • Access to this course
  • Access to 1,000+ courses
  • Learn at your own pace
  • Discuss your learning in comments
  • Tests to boost your learning
  • Digital certificate when you're eligible

Cancel for free anytime

Limited access


Sample the course materials

  • Access expires 27 Jul 2024

Find out more about certificates, Unlimited or buying a course (Upgrades)

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