What does the break-even analysis help a business determine?

The break-even analysis is primarily focused on identifying the specific level of sales volume at which a business's total revenues equal its total costs, meaning that the business is neither making a profit nor incurring a loss. By calculating the break-even point, a business can determine how much it needs to sell to cover all fixed and variable costs associated with production and operation.

Understanding this critical point enables business owners and managers to make informed decisions regarding pricing strategies, cost management, and sales targets. It provides valuable insight into the viability of a business model, helping assess future growth and sustainability. This analysis is essential for financial planning, as it directly influences strategies for achieving profitability.

While the other options touch on important aspects of business strategy and performance, they do not specifically encapsulate the primary purpose of break-even analysis, which is to establish the relationship between costs, sales volume, and profitability.