If breakeven analysis is sales minus fixed and variable expenses from the P&L, why does the templet I downloaded include principal portion of debt? This is a balance sheet item - it never hits P&L? Am I missing something?

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Originally Posted by mcknoep

If breakeven analysis is sales minus fixed and variable expenses from the P&L, why does the templet I downloaded include principal portion of debt? This is a balance sheet item - it never hits P&L? Am I missing something?

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You are mixing up several concepts. A break even analysis shows the point at which a product will break even by value, so it is a chart that looks like introduction to break-even analysis

debt itself is not included in a break even analysis, however, the cost of servicing and repaying debt would be, generally as a fixed cost. Remember, we need to borrow £X in order to buy the equipment we need to make the product.