ABSTRACT
The traditional approach to breakeven analysis can be described as: the determination of the level of output for some forthcoming period, typically one year, at which, using its existing scale of productive capacity, a firm breaks even in the historic-cost (accruals) accounting sense of the expression. As is now widely appreciated, accruals measures of costs and revenues generally deviate from their cash flow counterparts and usually, though not always, profit measured on an accruals basis exceeds earnings measured on a cash flow basis.
