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.
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.