‘Minimum level of activity’—A quick method of assessing growth potential in the smaller business

The purpose of this article is to provide a method for making a quick assessment of the growth potential of small and medium-sized companies. It provides in particular a calculation of the maximum level of activity to cover costs and achieve a given rate of profitability. This method makes use of graphic material and of simple relations, and does not involve complex calculations. It enables the user to make a simplified forecast of his accounts.