Accurate calculations are essential to the financial health of any company. If you’re planning start-up costs, figuring out your breakeven point or analyzing the value of a possible acquisition, you must employ the right tools. Calculations can be straightforward or complicated however the results are what matter.
Start-up costs cover the costs necessary to establish a company including fixtures, equipment and office equipment. Research expenses, such as market and industry analysis could also be included in start-up costs. A good estimate of startup costs can be determined by examining the financial statements of businesses similar to yours in your industry or speaking with your bookkeeper or accountant for advice on particular cost categories. You should also consider adding a cushion of safety like 10% of your starting costs, to take into account the unforeseeable.
Calculating your total cost will enable you to determine if your business will earn a profit after selling your goods or services. You can determine your cost of goods sold (COGS) using an equation. This number is crucial for determining prices and profit margins.
The most efficient business calculators include a variety of functions and are simple to use. Some business calculators have built-in functions such as amortization and interest rate conversions. Others may have visual graphs or connect to a computer for secure storage of calculations. You can also find business calculators that have more advanced features, for instance, an NPV calculator, which employs the discounted cash-flow calculation to determine the net present value of future cash flows.
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