#  >  > Business, Marketing, Advertising, Finance >  >  > Business Management & Administration >  >  > Finance >  >  Cost-volume-profit analysis (CVP) Benefits for the company's Growth

## Bhavya

Cost-volume-profit analysis (CVP) is used to calculate how the changes in volume and costs impact a company's net income and operating income. CVP is one of the effective tool which helps accountants to make decision regarding future operation.

*Benefits of CVP*


Helps to analyze which services and products are profitable and how can business use these services and products to get the maximum sum of revenue.Explains what sales volume will be necessary by the business in order to reach a fixed level of profits.Tells how much revenue should the business target to avoid losses occur.Highlights what would be expected budget of the business.Helps todetermine businesss fixed costs and measure the amount of risk related with any investment.Operating LeverageIncome Tax BenefitsFuture ForecastingHelps to prepare budgetsHelps to control costHelps in products or services Price DeterminationHelps in profit planning.

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