If you start a new business, create a new product, or change a business model, break-even analysis lets you find out at what stage your company, product, or service will become profitable. Break-even point is the stage where you have no profit yet but have no loss already. However, there are many preceding and following stages important for the investor. The investor wants to know not only how quickly the initial investments will pay off, and extra income will be received, but also how quickly the normal profit and the economic profit will be earned.
A revenue the company generates from selling the products or providing the services should cover the fixed costs, variable costs, and leave a contribution margin. The point where the total operating margin (the difference between the price of the product or service and the variable costs per item or customer) covers the fixed costs is called a break-even point.
Manual data entry into spreadsheets and especially entering data into text cells leads to many errors. Excel data validation tools allow you to reduce the inaccuracy of Excel data entry by restricting the set of possible values to a pre-defined list. Users can select the item from a drop-down list with few choices, instead of typing text into the data entry form template.
When you import data into Excel spreadsheets from Internet pages or CSV files, Excel fails to recognize some numbers and converts them to the default text type. Temporarily changing Excel settings helps to reduce the amount of manual work and the number of errors on replacing comma to point, dot to comma, semicolon to comma, etc. Also, you need to change decimal delimiter settings for printing or exporting data for international users.
Excel pie charts are useful to display fractions of a whole by splitting a circle into sections. Each section looks like a slice of a pie and represents a category. Such a layout makes it easy to observe relationships between parts, but the smaller becomes the slice (less than 10%) – the harder becomes to estimate it visually.
This is the third and last part of the tip How to create a mosaic plot in Excel (the second part is How to create a step Area chart for the Mosaic plot in Excel). The step area chart created in the previous part has invalid labels for both axes and no data labels:
This is a second part of the tip How to create a mosaic plot in Excel. The first part describes how to prepare the data for the step Area chart created in this part.
Pie and bar charts greatly simplify the understanding of percentages distribution for one categorical variable but fail to build a meaningful representation of two and more variables. A quite recent innovation in data visualization real is the Mosaic plot, which helps to grasp the correlations within marketing, sales, and other financial data. You will not find this chart among Excel standard charts, but you can build one.