Cost-Volume-Profit (CVP) Analysis
A Simple But Powerful Tool
CVP is a powerful tool for:
- Break-even analysis (i.e., how much you need to sell to make a profit)
- Estimating burn rates (i.e., how much net cash is used each month) for startups
- Calculating profit at varying sales volumes (i.e., sensitivity and scenario analysis)
In this video, I’ll:
- Explain two versions of the formula to help you calculate your profit
- Show how to graph profits at varying sales with CVP