If the CVP analyses showed that the company( any example company ) was not operating at break-even, then  where on the financial statements we night able to see this impact (i.e., specific line items on the statements)?

 

Answer:

Net income would be either greater than zero or less than zero if the company is not operating at break-even.

Step-by-step explanation

CVP analysis helps in analyzing how the changes in the cost and volume would affect the company's operating and net income. As per this analysis, every expense must either be treated as fixed or variable cost. Contribution margin is one of the most important term in this analysis. It is computed by deducting variable cost from the sales.

Break-even point is the point at which contribution margin is equal to the fixed cost. This means net income of the company is nil. Thus, if company is operating at break-even point, then its net income would be equal to zero and if company is not operating at break-even point, then it means that the net income of the company would either be greater than zero or less than zero.

So, if the company is not operating at break-even, then the impact would be clearly seen on the amount of net income of the financial statement. Net income would be either greater than zero or less than zero.