Break-even

A profit or loss has not been made, although opportunity costs have been "paid" and capital has received the risk-adjusted, expected return.

In the linear case the break-even point is equal to the fixed costs divided by the contribution margin per unit.

Establishing the break-even point helps businesses in setting plans for the levels of production it needs to maintain to be profitable.

[3] The accounting method of calculating break-even point does not include cost of working capital.

Its purpose is to prohibit clubs from spending more money on transfers than they earn as businesses, i.e. revenue per each fiscal year excluding donations from sponsors or advertisers.