Break-even Analysis of Square Textile Limited, Bangladesh: An Empirical Study

Authors

  • Syed Nazmul Huda
  • Sanuar Hossain
  • Md. Rouf Biswas

Keywords:

Break-even, Contribution margin, Decision making, Profit, Sales

Abstract

The break-even point is the amount that a corporation must bring in to cover costs and operate the business. Business is currently neither making a profit nor suffering a loss. This essay's major goal is to analyze Square Textile Limited's break-even point in Bangladesh for the fiscal years 2015–2016 to 2019–2020. A combination of primary and secondary sources has been used to get the data. The analysis of the company's break-even point has primarily relied on secondary data. Several statistical measures, including mean, standard deviation, coefficient of variation (CV), variance, compound annual growth rate (CAGR), and index number, The gathered data have been examined using correlation analysis and hypothesis testing. Many break-even point factors, including cost, revenue, and contribution margin, have also been thoroughly examined. The investigation and findings have led to certain recommendations being made. The results of the study reveal that the actual sales of square textile limited are higher than Break Even point sales. The study reveals that the company’s overall cost and sales revenue is not correlated linearly. Analysis of sales, cost, and profit relationships has also been analysed to predict relationships among them. The relationship between break-even analysis with corporate profitability has been examined and found that there is a significant relationship between them and both are positively correlated with each other.  It is also found that the changes in total sales never bother the Break-even point rather the study shows that changes in actual sales have a significant bearing on Break Even Point sales.

Published

2023-04-21