The Static Break-even Analysis of Productive Investment Projects Considering the Inventory

The traditional break-even analysis, the future cash flows produced after project operational having not considered the supply and demand\´s influence of the actual consumption market, is based on the basic assumption “balance between production and sales”. But most investment projects have large investment and last a long time, and typically the output is also very large, therefore, it\´s difficult to ascertain the future profits and costs, the inventory come out easily in the product market. To get close to the market and really assess the future cash flows of the investment projects. In the balance analysis, the factors of inventory that is created between the consumer market and the investment should be given full consideration. The article points out, it is difficult to reach "balance between production and sales" in the real market, it is to improve the traditional break-even analysis by considering inventory. It can reduce the break-even point and the production load and also can improve the ability of adapting the market and resisting risks.