2006-09-19 13:06:18 · 4 answers · asked by Dimitri VanHorn 1 in Business & Finance ➔ Other - Business & Finance
Combined with a sensitivity or demand forecast model it can provide you with an idea of probability of a venture succeeding or failing, as well as a margin of safety. Additionally CVP (cost-volume profit), or "break even", can provide information regarding the financial model of the company. By implementing CVP management is forced to understand what is variable and what is not. This can lead to organizational changes to minimize risk from a high fixed expense structure.
2006-09-19 15:09:06 · answer #1 · answered by MagicalMke 4 · 0⤊ 0⤋
So you know what the minimum amount you have to sell is.
If you are tracking your progress, you can tell if you are 'on track' to make or lose money each day/week/month/year.
Like the guy in the boxcar told me...I knew I was selling at a loss, but I thought volume would take care of me...
2006-09-19 13:14:58 · answer #2 · answered by Anonymous · 0⤊ 0⤋
So how many products or services you need to sell to cover your fixed expenses.
2006-09-19 13:09:37 · answer #3 · answered by Johnny Gunns 3 · 0⤊ 0⤋
so you dont lose money, while not knowing it
2006-09-19 13:07:55 · answer #4 · answered by bonkti 3 · 0⤊ 0⤋