# CVP Analysis Template

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## 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.

Here is a screenshot of the CVP analysis template:

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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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