Cash flow & operations
Business Debt Break-Even Calculator
Find the monthly revenue needed to cover variable costs, fixed expenses, and debt payments.
How to use this calculator
- Separate fixed costs from costs that rise with each sale.
- Enter variable costs as a percentage of revenue.
- Add debt payments separately. Compare operating break-even with cash break-even including debt.
How the calculation works
Contribution margin is one minus the variable cost percentage. Operating break-even divides fixed costs by that margin. Cash break-even adds debt payments to fixed costs before dividing by the margin. The difference is the extra revenue needed to support debt payments. This is a cash planning model; principal repayment is a cash use but is not generally an operating expense for accounting profit.
Worked example
These results use the editable example values shown in the calculator. They illustrate the method and do not predict an offer or outcome.
- Cash break-even monthly revenue
- $75,000.00
- Operating break-even revenue
- $50,000.00
- Revenue needed to cover debt alone
- $25,000.00
- Contribution margin
- 60.00%
Questions about the results
Why does debt-inclusive break-even exceed operating break-even?
Debt payments require cash after operating expenses. The extra revenue needed depends on how much of each sales dollar remains after variable costs.
What if variable costs are 100% of revenue?
Sales would generate no contribution toward fixed costs or debt. There is no finite break-even revenue under that assumption, so this tool requires a contribution margin above zero.