The financial health of a business is dependent on accurate calculations. It’s crucial to use the proper tools when planning the cost of starting up and calculating your breakeven point or analyzing a possible acquisition. Calculations can be simple or complicated but the outcomes are crucial.
Start-up costs are the cost required to begin a new business like fixtures, equipment, and office supplies. Start-up costs can include research expenses, such as market and industry analyses. You can estimate startup costs by examining the financial statements of companies in your industry or asking your bookkeeper or accountant about 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 unexpected costs.
Calculating your total cost can help you determine if you will earn a profit after selling your goods or services. Calculate your cost of goods (COGS) by using an equation. This number is crucial for determining the cost of goods sold and profit margins.
The best business calculators are simple to use and come with a variety of functions. Certain business calculators come with built-in functions such as amortization and interest rate conversions. Some may also have visual graphs or connect to a computer for secure storage of calculations. There are many business calculators with more advanced features. For example an NPV calculator that uses the discount-cash-flow method to calculate future cash flows’ net present value.
