The financial health of a business depends on accurate calculations. It is essential to use the proper tools when planning the cost of starting up and calculating your breakeven point, or analyzing a potential acquisition. Business calculations can be simple or complex however the results are crucial.
Start-up costs include the expenses necessary to establish a company that include fixtures, equipment, and office supplies. Research expenses, which comprise analysis of the market and industry could also be included in the start-up costs. You can estimate the startup costs by examining the financial statements of businesses that are in your field, or asking your accountant or bookkeeper questions about specific cost categories. You should also consider adding a cushion of safety that is at least 10% to your initial costs, to cover the unexpected.
Calculating your total costs will help you determine the profit, if any, you can expect to earn after you’ve sold all your products or services. Calculate your cost of goods (COGS) by using the formula. This is a crucial figure for setting prices and determining your profit margin.
The best business calculators are simple to use and come with a variety of functions. Some business calculators come with built-in features like interest rate conversions and amortization. Others may include visual graphs or connect to a computer for secure storage of calculations. There are also business calculators with more advanced features. For example, an NPV calculator that uses the discount-cash-flow method to calculate the future cash flows’ net present value.