Overview

Qvinci is excited to introduce a new Business Intelligence (BI) report: the Breakeven and What-if Analysis report. This report is available in two versions: Native (N) and SCoA (S). It is designed to provide insights on a single entity at a time.  Breakeven analysis is a way to figure out how much you need to sell to cover all of your costs (Controllable and Non-Controllable).

• BI- Breakeven and What-if Analysis 

Purpose

The Breakeven and What-if Analysis report aims to assist users in determining the breakeven point and the revenue required to cover an entity’s non-controllable costs (such as rent, utilities, salaries, etc.). The template also features a "What If" section that enables users to modify numbers, percentages, and reallocate accounts between "Controllable" and "Non-Controllable" costs. This allows for the simulation of different scenarios, providing a deeper analysis of ways to improve the Profit and Loss (P&L) performance for the selected entity.

As always, you can access this report from the Library > Gallery section.

Summary of Contents

The Breakeven and What-if Analysis report is another powerful tool in Qvinci’s suite of Business Intelligence resources. This tool is especially valuable for users seeking to determine the income necessary to cover both fixed and variable costs, and for simulating different cost-saving scenarios to optimize performance.           

BI- Breakeven and What-if Analysis (N) & (S)

What's New:

The Breakeven and What-if Analysis template consists of three primary tabs:

1. Breakeven Analysis
2. Breakeven Explained
3. Quick Start

Breakeven Analysis:

The Breakeven Analysis tab displays P&L numbers for the selected period. Users can choose from three reporting periods: Reporting Month, Reporting 3 Months, or Fiscal YTD. The default is Fiscal YTD, but users can adjust the period using the Selectable Periods dropdown menu.

Once a period is selected, the template will automatically calculate the breakeven point based on the chosen timeframe. The report is structured into five main sections, helping users understand how the breakeven point is determined, and which costs have the greatest impact on their business.

These are the Five P&L Account types:

(A)  Total Income

(B)  Controllable Costs

(C)  Contribution Margin

(D)  Non-Controllable

(E)  Profit or Loss

(A) Total Income
This field represents the actual income for the selected period. Users can choose to include or exclude “Other Income” depending on whether it is considered fixed income that impacts the breakeven point.

B)  Controllable Costs  

These costs are typically linked to income and can be adjusted based on business activity. For example, selling more products increases the cost of goods sold (COGS), which is a controllable cost. The template automatically includes COGS in this section

C)  Contribution Margin

This figure represents the difference between Total Income and Controllable Costs, and it indicates the percentage that contributes to covering Non-Controllable Costs (e.g., rent).
D)  Non-Controllable Costs

These are fixed costs that do not vary with income. Examples include rent, salaries, and leases. These expenses must be paid using the Contribution Margin.
E)  Profit Or Loss

The final result is the Profit or Loss, which is derived by subtracting both Controllable and Noncontrollable costs from the Total Income. The breakeven point occurs when this value reaches $0.

The What if Analysis
The What-If Analysis section mirrors the actual data from the Breakeven Analysis tab but allows users to modify numbers, percentages, and other variables. By adjusting these inputs, users can explore various scenarios and identify potential cost-saving strategies.
For example, users can input custom percentages or amounts to simulate different financial outcomes and determine the most optimal operational adjustments.

Template Interactive functionality

The Breakeven and What-if Analysis template has been designed with interactivity in mind, allowing users to customize their analysis by modifying amounts, P&L accounts, and percentages. Key interactive features include:

1)  Selectable Periods:  Change the selected period from the default Fiscal YTD by using the dropdown menu.

2)  Selectable Controllable Costs Accounts: Swap accounts between Controllable and Noncontrollable categories to simulate different scenarios.

3)  What if Total Income: Modify the total income by entering a custom amount in the designated field.

4)  What if Percentages: Adjust the default percentages to see how different assumptions impact your results.

Breakeven explained (Tab)

The Breakeven Explained tab is designed to provide a thorough understanding of the breakeven analysis methodology. It includes detailed information to help users fully comprehend the purpose and benefits of calculating the breakeven point for their entity.

Quick Start (Tab)

The Quick Start tab offers a step-by-step guide to using the Breakeven and What-if Analysis template. It includes simple instructions and visual aids to help users quickly familiarize themselves with the tool and start analyzing different scenarios.

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