Business Calculations
The financial health of a business is dependent on accurate calculations. It is vital to use appropriate tools when planning startup costs or calculating your breakeven points, or analyzing a potential acquisition. Calculations can be straightforward or complicated however the results are what matter.
Costs for starting up are the costs needed to begin a new business, including furniture, office equipment, and equipment. Start-up costs can include research costs, such as market and industry analysis. You can estimate startup costs by looking over the financial statements of businesses in your field or asking your accountant or bookkeeper for specific cost categories. It is also recommended to add a safety cushion like 10% to your initial costs, to cover the unexpected.
Calculating your total costs will help you determine the profit, if any, you can make after you have sold all of your products or services. You can calculate your cost of goods sold (COGS) using the formula. This is a crucial figure in setting prices and determining your profit margin.
The best business calculators are simple to use and offer an array of functions. Some business calculators have built-in functions, such as amortization and interest rate conversions. Certain business calculators feature visual graphs, and others connect to a computer so that calculations can be saved in a safe manner. You can also find business calculators that come with more advanced options, like an NPV calculator, which utilizes the concept of discounted cash flow to calculate the net present value of cash flows in the future.