profit-volume graph

A profit-volume graph shows how a company's profit changes with sales volume. It plots sales quantity on the horizontal axis and profit on the vertical axis. The graph helps identify the point where the company breaks even—covering all costs—and starts making a profit. Typically, the graph has a rising line indicating that increasing sales leads to higher profit. This tool helps managers understand how sales volume impacts profitability and make informed decisions about pricing, production, and sales strategies.