Break-even analysis is a tool used by businesses to determine their break-even point: the level of sales necessary to cover all operating costs and make a profit. It involves calculating fixed costs, variable costs, and total revenue, then determining when these intersection at the break-even point in order to start making money. Companies can use this data to develop strategies for increasing profits or minimizing losses. The concept of break-even analysis has been around since the Industrial Revolution, but remains highly relevant today – it’s a crucial component of financial planning and ensuring business success.