What term is used when a business's expenses are exactly the same as their income?

The term that describes a situation where a business's expenses are exactly the same as their income is known as the Break-Even Point. At this point, the business has neither made a profit nor incurred a loss; instead, it has balanced its total revenue with its total expenses.

Understanding this concept is crucial for businesses because it helps them determine how much they need to sell in order to cover their costs before they start generating profits. Knowing the break-even point enables businesses to set sales targets, price products appropriately, and manage expenses effectively to ensure long-term viability.

In contrast, net loss occurs when expenses exceed income, while net profit refers to the situation where income surpasses expenses. The operating margin is a profitability ratio that indicates the percentage of revenue that remains after covering operating expenses but does not directly define the relationship of income equating to expenses. Hence, break-even point is the precise term to denote this balance.