Profit-Volume Chart

A Profit-Volume Chart is a visual tool used in business to illustrate the relationship between sales volume and profits. On the chart, the horizontal axis represents the number of units sold, while the vertical axis shows profit. The chart typically displays a line that increases as sales grow, indicating that higher sales lead to greater profits after covering costs. It helps businesses understand their break-even point—the point at which total revenues equal total costs—and to analyze how changes in sales volume can impact profitability, aiding in decision-making and financial planning.