What Does the Breakeven Point Mean for Managers

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The Answer is For managers,breakeven point (BEP)is considered to be the minimum acceptable position for the business in the short term.Operating below the breakeven point means that the organization is operating in a loss position and,therefore,would need to draw upon its cash reserves and/or access to external cash resources (debt financing or equity financing)in order to assist in covering its expenses.If the organization did not possess sufficient cash reserves,and did not have access to additional cash from external sources,the end result could be insolvency and business closure.

What Does the Breakeven Point Mean for Managers

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