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Finance & Banking vocabulary · Financial Statements

Break even

Meaning in finance & banking, with examples

phrasal verbCommon term

In finance & banking, break even means: To earn exactly enough to cover all costs, so that there is neither a profit nor a loss.

In Turkish: başa baş gelmek, ne kar ne zarar etmek, başa baş noktasına ulaşmak

How it is used

Used in business plans, project evaluation and lending to new businesses. A start-up or new branch expects to break even after a certain time; the break-even point is the sales level where this happens. As a noun or adjective it takes a hyphen: break-even analysis. The past tense is 'broke even'.

Example sentences

  1. The hotel needs an occupancy rate of 60% to break even.

  2. According to the business plan, the factory will reach break-even in its third year.

Common collocations

  • break even
  • break-even point
  • break-even analysis
  • reach break-even
  • profitMoney a business earns after subtracting its costs from its revenue. When costs are higher than revenue, the result is a loss.
  • in the blackMaking a profit, or having a positive balance in an account. It is the opposite of 'in the red'.
  • expenseMoney that a business spends, or a cost it records, in order to run its activities and earn revenue, such as salaries, rent or interest.
  • revenueThe total income a company receives from its normal business activities, such as selling goods or services, before any costs are deducted.
  • cash flowThe movement of money into and out of a business over a period. Positive cash flow means more money is coming in than going out.

This word in other fields

The same English word can have a different meaning in another field:

More terms: Financial Statements

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This page explains English vocabulary for learners. It is not financial advice.