Break-Even Analysis and Operating Leverage (Análisis De Punto De Equilibrio Y Apalancamiento Operativo - in Spanish)
Grupo Consultor CAV Capital Advisory & Valuation
Miguel Ricardo Davila
Pontifical University Javeriana Cali
February 13, 2011
This is a teaching material for a module of Financial analysis at Universidad Tecnológica de Bolivar. The educational material was developed with Professor Ricardo Davila from Universidad Javeriana, Bogota, Colombia. The written material has been modified several times using the feedback from students and other users. This material is an unpublished one.
This chapter is a detailed presentation of the traditional break-even point model and the operational leverage for a firm. However, we make some changes to the traditional way of looking at the break-even analysis, including how to analyze the discontinuing of products in case they are not profitable. We give detailed examples for each case.
Note: Downloadable document is in Spanish.
Number of Pages in PDF File: 26
Keywords: Accounting, financial management, break-even point analysis,operating leverage
JEL Classification: M41
Date posted: February 15, 2011 ; Last revised: March 23, 2011