Break-even analysis is a financial tool used to determine the point at which a business's revenues equal its costs. This point, known as the break-even point, helps entrepreneurs understand how much they need to sell to cover their expenses. By calculating fixed costs, variable costs, and sales price, businesses can visualize their profitability and make informed decisions. Understanding break-even analysis is crucial for business owners and investors alike. It allows them to assess the viability of a product or service and set realistic sales targets. By knowing the break-even point, they can strategize effectively to maximize profits and minimize losses.