Learning Objectives
By the end of this module, you will be able to:
Understand the Purpose and Role of Breakeven Analysis
Recognise breakeven analysis as a tool for assessing financial viability and debt servicing capacity.
Understand the importance of aligning breakeven timelines with the client’s cash flow cycle and operational performance.
Evaluate Key Breakeven Metrics and Their Impact
Calculate and interpret breakeven points in units and revenue.
Interpret contribution margins and understand their relationship to profitability and credit risk.
Tailor Loan Structures Using Breakeven Insights
Recommend suitable repayment schedules (e.g. interest-only, deferrals) based on breakeven performance.
Structure loans to support cash flow stability and reduce repayment risk.
Apply Breakeven Analysis for Risk Mitigation
Use breakeven data to identify cost inefficiencies or revenue gaps.
Propose solutions such as cost reduction, price adjustments, or operational efficiencies.
Use the Margin of Safety as a resilience measure in volatile markets.
Apply Breakeven Analysis in Real-World Lending Scenarios
Apply metrics such as Interest Cover Ratio (ICR) and Use practical case studies to build your skills in analysing cost structures and structuring loans accordingly.
Monitor breakeven performance over time to identify early warning signs, adjust loan terms, and engage with clients proactively.
