Scholarly record
THE BREAK-EVEN POINT AS A BUSINESS MANAGEMENT TOOL FOR NATURAL DISASTER DAMAGES
Abstract
The aim of the paper is to examine the role of the break-even point (BEP) as a business management tool in the conditions of natural disasters and to propose various managerial scenarios for effective decision-making after severe damage to production equipment. The break-even point of a company represents the sales volume or revenue level at which total revenues equal total costs (both fixed and variable), meaning that the enterprise neither makes a profit nor incurs a loss. Below this threshold, the company operates at a loss, while above it, profitability begins to appear. This study explores four managerial scenarios: Scenario for increasing fixed costs and decreasing unit variable costs; Scenario for increasing fixed costs and increasing unit variable costs; Scenario for increasing fixed costs, increasing unit variable costs, and increasing unit price; Scenario for reducing fixed costs without changing unit variable costs. By using the break-even point as a business management tool the companies can successfully design strategies for sustainable recovery and profitability under the conditions of natural disasters.
Publication Impact Profile
Publication details
References12
Rohde M.M., Floods and droughts are intensifying globally. Nat Water, vol. 1, pp 226�227, 2023. DOI: 10.1038/s44221-023-00047-y
Tin D., Cheng L., Le D., Hata R., Ciottone G., Natural disasters: a comprehensive study using EMDAT database 1995�2022, vol. 226, pp 255-260, 2024, DOI: 10.1016/j.puhe.2023.11.017.
Ritchie H., Rosado P., Is the number of natural disasters increasing?, OurWorldinData, Natural Disasters, 2024. https://ourworldindata.org
Schroeter S.A., Orme A.M., Lehmann K. et al. Hydroclimatic extremes threaten groundwater quality and stability. Nat Commun, vol. 16, Article number: 720, 2025. DOI: 10.1038/s41467-025-55890-2
Roy P., Pal S.C., Chakrabortty R. et al. Climate change and geo-environmental factors influencing desertification: a critical review. Environ Sci Pollut Res., 2024. DOI: 10.1007/s11356-024-32432-9
UNDRR, Global Assessment Report on Disaster Risk Reduction 2022: Our World at Risk: Transforming Governance for a Resilient Future. Summary for Policymakers, Geneva: UN, 2022.
Dai T., Tang C.S., Natural Hazards and Supply Chain. Oxford Research Encyclopedia of Natural Hazard Science, Oxford University Press, 2024. DOI: 10.1093/acrefore/9780199389407.013.512
Berk J., Demarzo P., Corporate Finance: The Core, 5. Edition, Pearson PLC, 2022.
Brealey R., Myers St., Marcus A., Fundamentals of Corporate Finance, Tenth edition, McGraw-Hill Education, 2020.
Luvaren A., How to Reach the Break Even Point Quickly: Easy Practical Guide to Reach the Break Even Point, Independently published, 2024.
Cafferkyq M., Wentworth J., Break Even Analysis, Business Expert Press, 2010.
Sareshwala T., Break-even point, Notion Press, 2023.
View or Download full articleAccess options
SWS access login
Login as SWS Scientific CommitteeLogin as SWS Scientific PartnerLogin as SWS AuthorAuthors and approved SWS contributors will read and export their own linked papers after identity matching by SWS profile, email and SGEM GlobalID.
For librarian assistance: [email protected]
Purchase Instant Access
- Article can be downloaded after successful payment.
- Article may be used according to SWS library access terms.
- Article cannot be redistributed.