Borrowing money is required whenever - 1) There is a cash deficiency. 2) Less money than the bare minimum necessary cash balance is available.
Perhaps the terms "Balance Point" or "Break Even" don't signify much to many business owners or directors of small and medium-sized enterprises. However, we all understand what it means when a company is in the red or is "bleeding to death," and it may even keep us up at night. Knowing a company's Point of Balance in great detail may be the most important asset any manager has. This expression in the context of business describes the point when the "Cost of the Products" plus the "Expenses" equal the "Total Business Income" (Costs + Expenses = Maximum Income). It is, in other words, the point that occurs when there is neither a loss nor a gain overall.
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