The margin of safety and flexibility of processes – two indicators provided by Break Even Analysis
Phd candidate Albert Lusha, Prof. Asoc. Dr. Ina Pagria, Prof. Asoc. Hidajet Shehu
Faculty of Economy and Agribusiness, AUT
In this article we present applications for prospective analysis that highlighted the company’s ability to realize profits even assuming changes in sales and/or its obligations. Point of departure for this analysis is the calculation of Break-Even Point (following: BEP), that is the point at which revenues and total costs of production equal, so operating profit is zero.
BEA’s balance applied to the analysis enables the assessment of the economic situation of the enterprise, which is considered as the ability of the enterprise perspective to achieve or maintain a favorable balance between revenues and costs, and to take positive economic results and, possibly, at budgeted levels. Therefore analysis of the economic situation oriented to the future, are projections of the future evolution of the enterprise system and possible changes to the structure of production processes. In any case, it is necessary not to forget that the usefulness of these simulations is based on the assumption of no change or modification non operating structure compared to that received by the BEA data to apply to the balance that must be analyzed.