Cost-volume-profit (CVP) analysis is used to determine how changes in costs and volume affect a company's operating income and net income.
BAM has a robust asset management business that is not fully valued in its share price with stable CFs and predictable revenues derived from real assets that retain value.
Recent fears about rising interest rates have pushed BAM into oversold territory as investors overreact to potential devaluation of the property operating segment, giving you a unique entry point.
Thesis: Brookfield Asset Management (NYSE: BAM) is a proven alternative asset manager that benefits from allocating assets to areas with lowered liquidity, under duress, or facing significant headwinds.
The break‐even point represents the level of sales where net income equals zero.
In other words, the point where sales revenue equals total variable costs plus total fixed costs, and contribution margin equals fixed costs.
The last calculation using the mathematical equation is the same as the break‐even sales formula using the fixed costs and the contribution margin ratio previously discussed in this chapter. The break‐even point in units of 250,000 is calculated by dividing fixed costs of $300,000 by contribution margin per unit of $1.20.