Cost Volume Profit (CVP) Analysis Template
What is it?
An analysis that assumed different sales amounts to derived how much profit would be earned at each sales amount.
Why is it important?
This is an excellent way to find out the break-even sales (i.e., how many sales do we need to make a profit). It also is a sensitivity analysis test to see how much profits would go up and down based on how much sales go up or down.
When and how would you use it?
A CVP analysis is one way to test the potential profits of a new location. It can also be used in budgeting. For an example of using a CVP table for a new location analysis, see the video on Break-Even Analysis or the Break-Even Analysis lesson in the Analyzing New Locations course.