CVP Analysis Template
CVP Analysis Template
This CVP analysis template helps you perform a break-even analysis, calculate the margin of safety and find the degree of operating leverage.
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Cost Volume Profit (CVP analysis), also commonly referred to as Break Even Analysis, is a way for companies to determine how changes in costs (both variable and fixed) and sales volume affect a company’s profit. With this information, companies can better understand overall performance by looking at how many units must be sold to break even or to reach a certain profit threshold or the margin of safety.
#1 CM Ratio and Variable Expense Ratio
CM Ratio = Contribution Margin / Sales
Variable Expense Ratio = Total Variable Costs / Sales
#2 Break-Even Point
BEP = Total Fixed Costs / CM per Unit
#3 Changes in Net Income (what-if analysis)
# of Units = (Fixed Costs + Target Profit) / CM Ratio
#4 Margin of Safety
Margin of Safety = Actual Sales – Break-even Sales
#5 Degree of Operating Leverage (DOL)
DOL = CM / Net Income
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