Break-even analysis entails the calculation and examination of the margin of safety for an entity based on the revenues collected and associated costs. Analyzing different price levels relating to various levels of demand a business uses break-even analysis to determine what level of sales are necessary to cover the company’s total fixed costs. A demand-side analysis would give a seller significant insight regarding selling capabilities.
Break-even analysis tells you at what level an investment must reach to recover your initial outlay. It is considered a margin of safety measure.(Investopedia.com)