Cash Flow Break-Even Analysis

Use the chart in this section to perform a cash flow break-even analysis. If you’re a start-up business use estimates and remember that your estimated break-even point might not match your actual break-even point once you’re in business. A break-even analysis will show you the level of sales that you need to attain in order to cover your costs. If sales do not reach breakeven, you will not have enough cash to be able to pay all of your bills. Keep in mind that the profit break-even point is different than the cash flow break-even point. Even if you are earning enough in sales to generate a profit you may not be generating positive cash flow, which is essential to sustaining a business.