The financial health of any business is dependent on accurate calculations. Whether you are planning for starting costs, calculating your breakeven point, or looking at the value of an acquisition, you must make use of the correct tools. Business calculations can be easy or complex, but the results are critical.
The costs for starting up include the expenses necessary to establish a company, such as fixtures, equipment and office equipment. Research expenses, such as market and industry analysis, can also be included in start-up costs. A good estimate of startup costs can be made by examining the financial statements of comparable businesses in your field or talking with your accountant or bookkeeper for advice on specific cost categories. It is recommended to also include a safety cushion like 10% of your initial costs to cover the unexpected.
Calculating your total cost will allow you to determine if you will earn a profit after selling your goods or services. Calculate your cost of goods (COGS) by using the formula. This number is crucial to determine prices and profit margins.
The most effective business calculators are easy to use and feature an array of functions. Some calculators for business come with built-in functions like amortization and interest rate conversions. Others may have visual graphs or connect to a computer for secure storage of calculations. There are also business calculators with more sophisticated features, such as an NPV calculator, which utilizes a discounted cash-flow calculation to determine the net present value of future cash flows.
