Break-Even Point
Definition
The level of sales at which total revenue equals total costs, so the business makes neither a profit nor a loss. Calculated as fixed costs ÷ (price per unit − variable cost per unit). Knowing your break-even point tells you the minimum you must sell to stay solvent. HelloBooks surfaces break-even analysis from your cost and pricing data.
Related Terms in Business Terms
Budget
A financial plan that estimates expected revenue and expenses over a future period, used to set targets and control spending. Comparing actual results to budget (variance analysis) reveals where a business is over- or under-performing. HelloBooks lets you build budgets per department or project and tracks budget-vs-actual automatically.
MRR (Monthly Recurring Revenue)
The predictable revenue a subscription business earns each month. Calculated by multiplying the number of paying customers by the average revenue per user (ARPU). Key SaaS metric.
ARR (Annual Recurring Revenue)
The annualized version of MRR (MRR x 12). Used by SaaS companies to measure predictable yearly revenue. A key metric for valuation and growth tracking.
Burn Rate
The rate at which a company spends cash, typically measured monthly. Gross burn is total monthly spending. Net burn is spending minus revenue. Used to calculate runway (cash / net burn = months of runway).
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