What analysis determines the point at which total sales revenue equals total operating costs?

The analysis that identifies the point at which total sales revenue equals total operating costs is known as break-even analysis. This analysis is essential for businesses as it helps determine the minimum sales volume needed to avoid losses. In break-even analysis, the break-even point is established where revenues from sales equal the fixed and variable costs incurred in the operation.

Understanding break-even analysis is crucial for financial planning and decision-making, as it provides insights into the viability of the business model. It identifies how many units of a product must be sold and aids in making pricing decisions, evaluating cost structures, and setting sales targets.

The other analyses mentioned serve different purposes; for instance, cost-benefit analysis evaluates the financial advantages of a project versus its costs, profit margin analysis assesses the profitability relative to sales, and market analysis examines the overall market conditions, competition, and potential demand. This makes break-even analysis distinct and focused specifically on understanding costs relative to sales and financial sustainability.