Break-Even Point AnalysisDabur India Pvt Ltd

1. BREAK-EVEN POINT ANALYSIS
DABUR INDIA PVT LTD.
By
Section B, Group 3
Raj Singh Bhati (NMP62)
Rohan Telang (NMP69)
Ruchira Das (NMP70)
Sayan Sengupta (NMP76)
Sumit Mathur (NMP85)
Swaraj Kumar Dhar (NMP87)
Pradeep Varshney (NMP93

2. BREAK-EVEN POINT ANALYSIS
A decision-making aid that enables a manager to determine
whether a particular volume of sales will result in losses or
profits.
Variable costs are costs that change with changes in
production levels or sales. Examples include: Costs of materials
used in the production of the goods.
Fixed costs remain roughly the same regardless of
sales/output levels. Examples include: Rent, Insurance and
Wages.
Revenue is the total income received.
Profit is the money you have after subtracting fixed and
variable cost from revenue.
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3. WHAT IT CAN BE USED FOR?
 Monthly expenses- use it to see if your income is more then
your expenses
 Determine minimum price product can be sold for
 Determine optimum price product can be sold for
 Calculate effects of marketing programs on price
The Break-Even Point (BEP) Formula
P(X) = F + V(X)
Where:
 F = fixed costs
 V = variable costs per unit
 X = volume of output (in units)
 P = price per unit 3

4. THE BREAK-EVEN POINT FORMULA (CONT.)
If we rearrange the formula where the breakeven is X then the
formula look like this
X = F /( P – V)
This formula says that the breakeven point is where the number
of sales needed to make the cost equal to the revenue.
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Break-Event
Point

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6. CASE ANALYSIS
Data is picked from http://www.capitaline.com for dabur India
Ltd.
Estimates for 2015-16 are specified below
 Total Fixed costs -18619
 Total Variable costs - 29665
 Total Cost - 48284
 Fixed cost as a % of Total Cost - 38.56
 Variable cost as a % of Total Cost - 61.44
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7. CALCULATION OF MARGINAL COSTING
TOOLS
P/V ratio - ((Sales- VC) / Sales )*100 = 25391/55056
= 0.46
Break Even Sales(in Rs. Crores) - Fixed cost/(P/V ratio)
= 18619/0.461182 = 40372
Margin of safety - (Actual Sales - BEP(Rs)) = 54312-40372
= 13580
Margin of safety Ratio - (Margin of Safety /Actual
Sales)*100
= 13580/54312 = 25.00 7

8. PREDICTIONS
Desired Profit - 27358
P/V Ratio - 0.488
Fixed Cost -18619
Desired sales – 100000
Outcomes
Dabur’s MOS is 25% which is low.
BEP sales is Rs.40372 CR which is extremely low in
comparison to current sales.
For the company to reach a profit value of Rs.27358 it has
to impove its sales by Rs.100000 crores.
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9. LIMITATIONS OF BEP ANALYSIS
Assumes that sales prices are constant at all levels of
output.
Assumes production and sales are the same.
Break even charts may be time consuming to prepare.
It can only apply to a single product or single mix of
products.
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10. CONCLUSION
A Breakeven Analysis is a simple tool to use to determine
if you have priced your product correctly.
A Breakeven Analysis helps you calculate how much you
need to sell before you begin to make a profit. You can
also see how fixed costs, price, volume, and other
factors affect your net profit.
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11. REFERENCES:
 Mejorada, Nenita D., Business Finance and Philippine Business
Firms. 2006.
 A Framework for Management –Gary Dessler
 Dessler, Gary, A Framework for Management
 Math Lover Hub Pages. Even Point Analysis.
http://mathslover.hubpages.com/hub/Breakeven-analysis
 http://www.tutor2u.net/business/production/break_even.htm
 http://connection.cwru.edu/mbac424/breakeven/BreakEven.html
 http://www.dinkytown.net/java/BreakEven.html
 http://office.microsoft.com/en-us/templates/TC011165121033.aspx
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