Accurate calculations are vital to the financial health of any business. If you’re planning start-up costs, figuring out your breakeven point, or looking at the value of a potential acquisition, it is essential to make use of the appropriate tools. Calculations can be simple or complex, but the results matter.
Start-up costs cover the costs required to start a business, such as fixtures, equipment and office supplies. The cost of starting up can also include research costs including market and industry analyses. A good estimate of startup costs can be made by reviewing the financial statements of similar businesses in your sector or speaking with your accountant or bookkeeper for guidance on specific cost categories. It’s also an excellent idea to add an insurance buffer like 10%, when you calculate your initial costs to account for the unexpected.
Calculating your total cost will allow you to determine if you are able to make a profit selling your goods or services. Calculate your cost of goods (COGS) by using an equation. This is a crucial figure when setting prices and determining your profit margin.
The most effective business calculators are easy to use and feature a variety of functions. Some calculators for business have built-in features like interest rate conversions and amortization. Some business calculators have visual graphs, and others connect to computers so that calculations can be stored safely. There are also business calculators with more advanced features. For instance, an NPV calculator that makes use of the discounted cash-flow calculation to calculate the future cash flows’ net present value.
