The financial health of a company depends on accurate calculations. It’s crucial to use the proper tools when planning startup costs or calculating your breakeven points or analyzing a possible acquisition. Calculations can be straightforward or complicated, but the results matter.
Start-up costs are the expenses necessary to establish a new business, including fixtures, office supplies, and equipment. Research expenses, such as analysis of industry and market trends, can also be included in start-up expenses. A good estimate of startup costs can be made by examining the financial statements of comparable businesses in your industry, or by speaking with your accountant or bookkeeper for assistance on specific cost categories. It’s also a good idea to add an extra safety cushion like 10%, when calculating your initial costs to cover the unexpected.
Calculating your total costs will help you determine what profits, if any you can expect to earn after you’ve sold all your products or services. You can determine your cost of goods sold (COGS) by using an equation. This number is crucial in determining the price and profit margins.
The most effective business calculators come with many functions and are easy to use. Some calculators for business have built-in features, such as interest rate conversions and amortization. Some calculators for business have visual graphs, and others connect to computers so that calculations can be safely stored. There are many business calculators that have more advanced features. For example, an NPV calculator that makes use of a discounted-cash-flow calculation to determine the net present value.
