Accurate calculations are vital to the financial health of any company. It is vital to use proper tools when planning the initial costs or calculating your breakeven points or analyzing the potential for an acquisition. Calculations can be straightforward or complex, but the results matter.
The costs for starting up include the expenses required to begin a new business like fixtures, equipment and office equipment. The costs for starting a business can include research expenses including market and industry analysis. You can estimate startup costs by looking at the financial statements of companies in your industry or asking your bookkeeper or accountant about specific cost categories. You should also add a safety cushion that is at least 10% of your starting costs, to be prepared for the unforeseeable.
Calculating your total cost will help you determine what profit, if any you can make after you’ve sold all your products or services. You can determine your cost of goods sold (COGS) using a formula. This is an important business calculations figure in determining prices and your profit margin.
The best business calculators have various functions and are easy to use. Certain business calculators have built-in features like amortization and interest rate conversions. Some may also have visual graphs or connect to a computer for secure storage of calculations. You can also find business calculators that come with more advanced features, like an NPV calculator, which makes use of the concept of discounted cash flow to calculate the net value of cash flows in the future.