The financial health of any business depends on accurate calculations. It is essential to use the correct tools when planning for the initial costs, calculating your breakeven point or analyzing an potential acquisition. Business calculations can be straightforward or complex but the results are vital.
Start-up costs are the expenses required to launch a new business, including furniture, office equipment, and equipment. Research expenses, which include analysis of the market and industry are also included in the initial costs. It is possible to 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’s also recommended to include an insurance buffer of 10%, when you calculate your initial costs to allow for unexpected expenses.
Calculating your total cost will allow you to determine the profits, if any you will make after you’ve sold all your products or services. Calculate your cost of goods (COGS) by using a formula. This figure is important for determining prices and profit margins.
The best business calculators are easy to use and offer a variety of functions. Some business calculators come with built-in features, such as amortization and interest rate conversions. Others might have visual graphs or connect to a computer for safe storage of calculations. You can find business calculators that have more advanced features. For example, an NPV calculator that employs a discounted-cash-flow calculation to determine future cash flows’ net present value.