BREAK-EVEN POINT MODELLING AS A TOOL FOR STRATEGIC PLANNING AND BUSINESS RISK ASSESSMENT
Abstract
The article examines the use of break-even point modelling as an instrument of strategic planning and enterprise risk assessment. It analyses the economic foundations of the cost-volume-profit (CVP) model, methods for calculating the critical sales volume, and the influence of the structure of fixed and variable costs on contribution margin and operating leverage. The study highlights the role of financial analysis, the model’s sensitivity to price and cost parameters, and the use of scenario-based and probabilistic approaches for forecasting the risks of crossing the break-even threshold. It is shown that integrating break-even modelling into managerial decision-making supports the development of flexible pricing and investment policies, optimises the product portfolio, and enhances the resilience of the business model under conditions of uncertainty.
JEL: M15; M31; L81; D91
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DOI: http://dx.doi.org/10.46827/ejefr.v10i2.2162
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