Self-Study Course Details
Course Description
Cost-volume-profit (CVP) and break-even analysis are two related ways to quickly answer some key business questions that include:
- How much will our profits go up if sales volume goes up by 100 units?
- What do my sales need to reach for my new company to be profitable?
- How much will profits go down if we don't sell the budgeted number of units?
CVP and break-even analysis are incredibly useful tools that finance professionals use throughout their careers. The formula is simple but powerful. The CVP formula is the basic equation that determines almost every line of the income statement. It's the formula that drives projections, forecasts, and budgets. The formula can be used for a wide range of analyses that answer key business questions.
The course begins with a quick overview of how CVP analysis is used to calculate profitability and how break-even analysis can help you find a target sales volume. We also explore some key questions it can answer. The rest of this course dives deeper into these concepts. We'll look at the CVP and break-even formulas in more detail and how to use them. I'll show how they can help inform business decisions.
This course provides the basics for those new to CVP while providing insights to those with experience with CVP and break-even analysis.
Learning Objectives
- Recall the CVP and break-even formulas.
- Identify how to calculate the break-even point for multiple products.
- Recognize how costs and profits change across the relevant range of analysis.
Prerequisites
- None
Advanced Preparation
None
Author Details
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Robert Stephens
Rob Stephens is the Founder of CFO Perspective, which provides continuing education courses for CPAs and financial management courses for business advisors and staff. He has been quoted in Forbes, U.S. News and World Report, Business Insider, Business News Daily, and many other news sources. Rob has a 25-year career that includes serving as CFO for two banks and a health clinic system. He was also Director of Operations at a $4 Billion bank and SVP of Finance of a $2 Billion credit union. Rob is an adjunct instructor for the MBA program at Gonzaga University.
Rob holds a Masters of Science in Personal Financial Planning and a Graduate Certificate in Financial Therapy from Kansas State University. He received a B.A. in Business Administration from the University of Washington and is a CPA.
NASBA Sponsor
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Encoursa is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: NASBAregistry.org.
$24.00
CPE
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Purchase options
Self-Study Course
Cost-Volume-Profit (CVP) and Break-Even Analysis
- by Robert Stephens
- Credits: 1.50
$24.00
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