Break-Even Definition

Short Definition:
In business, the break-even point is when the level of income is equal to the level of expenses. The business has not generated a profit nor has it generated a loss.

Expanded Definition:
The break-even point (referred to as BEP) occurs when a business reaches the level where total income is equal to total expenses. Many businesses lose money during the first few years of operation. When the break-even point is achieved, it can be seen as a positive indicator of future profitability.

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