The break-even point in a business venture is the point at which total revenue equals total costs. This means that the business is neither making a profit nor incurring a loss. It's the minimum level of sales that the business needs to cover all its costs.
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Need to present the investment and reward opportunities of a new venture or project? Use our "Ultimate Startup Pro Forma" model to showcase a new prop...
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In his article for Harvard Business Review, Baruch Lev – the Philip Bardes Professor of Accounting and Finance at the Stern School of Business in NYU, talks about proforma as one of the ways in which managers can impart useful information to investors. (For more like this, check out our book summary). Lev stresses that "research shows that proforma earnings statements prominently displayed in the headline or first paragraph of a company's news release have a much stronger impact on stock prices than proforma earnings reported elsewhere in the document."
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