How to Create a Break Even Analysis. For a new business, the information found in the break-even analysis can be the most important aspects of the business's operations. This is the point in the ...

The break-even analysis helps determine whether a product will be commercially viable. Companies should note that there are some limitations to this calculation, and you cannot use it on its own.

Basically, a break-even analysis lets you know how many units of stuff—say, how many ham sandwiches, iPhone apps, or hours of consulting services—you must sell in order to cover your costs.