Break-even analysis

Break-even analysis

Bachelor of Business Studies (BBS) — Second Year

Subject: Fundamentals of Financial Management (MGT 215)

Unit 7: Capital Structure and Leverage

Academic Year: 2083/84

Topic Objectives

After studying this topic, students should be able to:

• Explain the scope and key elements of break-even analysis.
• Apply the relevant financial model, calculation or analytical approach and explain its assumptions and decision implications.

Curriculum Scope

• Operating break-even
• Cash break-even
• Financial break-even

Detailed Microsyllabus

1. Operating break-even

   1. Revenue equal to operating costs.
   2. Unit and sales-value calculation.
   3. Relevant fixed costs and contribution.

2. Cash and financial break-even

   1. Exclude prescribed noncash charges for cash break-even.
   2. Identify the earnings level meeting financing commitments.
   3. Compare the meaning of the three break-even measures.

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Curriculum reference: Tribhuvan University, Faculty of Management, revised four-year BBS curriculum, PDF pages 41-43.

Source note: The curriculum scope above is retained from the existing TU syllabus breakdown. The numbered study subtopics are editorial elaborations for teaching and study, rather than a separately issued TU syllabus. Unit or component allocations apply at their stated level; no separate topic hours or marks are assigned here.