Business Calculations

Accurate calculations are essential to the financial health of any business. Whether you are planning for beginning costs, determining your breakeven point or analysing the potential value of an acquisition, it’s important to make use of the appropriate tools. Calculations for business can be simple or complex but the outcomes are crucial.

Start-up costs cover the costs required to begin a new business, such as fixtures, equipment, and office supplies. These costs may include research costs, such as market and industry analysis. You can estimate the cost of starting by examining the financial statements of companies that are in your field, or asking your accountant or bookkeeper for specific cost categories. You should also consider adding a safety cushion, such as 10% to your starting costs, to account for the unforeseeable.

Calculating your total cost will enable you to determine if your business can earn a profit from selling your products or services. You can calculate your cost of goods sold (COGS) by using an equation. This is an important figure for setting prices and determining your profit margin.

The most efficient business calculators include numerous functions and are easy to use. Certain business calculators come with built-in functions such as amortization and interest rate conversions. Others might have visual graphs or connect to a computer for safe storage of calculations. There are also business calculators that include more advanced features. For example an NPV calculator that uses a discounted-cash-flow calculation to determine the future cash flows’ net present value.

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