The financial health of a business is dependent on accurate calculations. It is essential to use the proper tools when planning the cost of starting up or calculating your breakeven points or analyzing a possible acquisition. Business calculations can be easy or complex, but the results are critical.
Start-up costs cover the costs required to begin a new business like fixtures, equipment, and office equipment. The costs for starting a business can include research costs including market and industry analyses. A reliable estimate of startup costs can be derived by studying the financial statements of businesses similar to yours in your industry or speaking with your bookkeeper or accountant for assistance on particular cost categories. You should also add a cushion of safety of 10% to your beginning costs, in order to cover the unexpected.
Calculating your total cost will help you determine if you are able to make a profit selling your goods or services. You can determine your cost of goods sold (COGS) using a formula. This is a key figure for setting prices and determining your profit margin.
The most effective business calculators come with various functions and are simple to use. Some calculators for business come with built-in functions for amortization or interest rate conversions. Others may include visual graphs or connect to a computer for safe storage of calculations. There are also business calculators that come with more advanced features, like an NPV calculator, which uses a discounted cash-flow calculation to calculate the net value of future cash flows.