What is a breakeven point?
What is a breakeven point?
In the beginning periods of a new company, the company has many more expenses than revenues (if any revenue at all), and therefore records a loss every period. The breakeven point is when the company reaches the point that its expenses equal its revenues, and therefore, they “break even”, ie. have a bottom line of zero. This is a turning point for the company after which they start to record a profit at the end of reporting periods.
For more information on this topic, check out this article from our friends at Investopedia.