Applicability of cost-volume profit analysis in banks

Banking sector is one of primary important sector where competition is most intense. Banks must find low-cost funds and use this funds efficiently in this competitive environment. Considering rapid growing sector and ever-changing banking instruments also bank's managers have to make decision correctly and quickly. It is so important to calculate cost and revenue accurately while making decisions with regards to making true decision. This study shows CVP analysis can applicable for banking sector as other sectors so contributing decision process for managers which calculate interrelations cost, sales and profit. The aim of this study is to demonstrate how to Cost Volume Analysis applicate in Banks and show how importance for this kind enterprises. CVP analysis emphasizes the interrelationships of costs, quantity sold and price, it brings together all the financial information of the firm which is a powerful tool for planning and decision making. CVP analysis has not been applicated in banks until now therefore this shows the importance of this study.