It wouldn’t be completely inaccurate to say that almost everything in accounting is simple, but even the simplest things are difficult. While most of us understand the basic idea of a breakeven point, calculating it in the hospitality industry can get tricky.

No manager can pursue a successful career without understanding the company’s profitability. In a hotel, the calculation of a breakeven point is much less simple than you would suspect.

The trick arises from the somewhat awkward way in which fixed and variable costs are calculated. With multiple different operations and departments, not to mention numerous business assumptions and scenarios, there is often a large degree of subjectivity in how the rules are applied.

What Does This Course Teach You?

Though some students may find this course a little challenging, no prior knowledge of accountancy and profitability is required. Rather, non-financial managers and small business owners will be guided through the basics of breakeven point analysis. The course generally takes approximately 2 hours to complete.

Some of the subjects you will encounter include:

• The theory, fundamentals, and principles of breakeven points
• Calculating breakeven points in practice
• Common assumptions and pitfalls
• Distinctions between fixed and variable costs
• Strategic implications of breakeven points
• Sensitivity analysis of breakeven points

Not every manager needs to have a thorough grounding in accounting. However, without a basic idea of how profit is calculated, they will struggle to do their work and communicate with colleagues. Learning about breakeven points could set them on the right path to greater financial knowledge.