just to confirm, operating breakeven = breakeven w/o financing, breakeven = breakeven w/ financing? schweser is kinda noncommital
What is this from? CF?
i’d never thought of that… but aren’t they usually quite specific as to what they mean? usually i think it’s units to cover fixed costs before interest.
Hmm… I would think of interest expense as a fixed cost.
mwvt9 Wrote: ------------------------------------------------------- > Hmm… I would think of interest expense as a > fixed cost. sorry, fixed manufacturing cost is what i meant.
Let’s just go with the classic breakeven concept - operating breakeven in terms of operating costs, before any taxes or financing expenses. Or think this way: the breakeven concept should be applied to all firms, including those that don’t have debt and interest expenses. Theses firms only provide goods and services and the primary cash inflow is revenue and the primary cash outflow is cost of goods/services, not counting taxes.
yeah thats def what i thought, but i remeber i got a qbank wrong on that assumption - they wanted finance costs included… so wondered if anyone knew something i was missing…