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Accurate calculation is essential to the financial health of any company. If you’re planning starting costs, calculating your break-even point, or analyzing the value of an acquisition, you must utilize the proper tools. Business calculations can be straightforward or complex but the results are vital.
Start-up costs are the expenses necessary to establish an enterprise, which includes furniture, office supplies, and equipment. Research expenses, such as analysis of the market and industry are also included in start-up costs. You can estimate the cost of starting by looking over the financial statements of companies in your field or asking your accountant or bookkeeper questions about specific cost categories. It’s also an excellent idea to add an insurance buffer of 10%, when calculating your initial costs to allow for unexpected expenses.
Calculating your total cost will aid in determining if you will make a profit after selling your products or services. Calculate your cost of goods (COGS) by using a formula. This is a crucial figure in setting prices and determining your profit margin.
The best business calculators are easy to use and offer various functions. Some calculators for business have built-in functions for amortization or interest rate conversions. Certain business calculators come with visual graphs, while others connect to computers to allow calculations to be safely stored. There are also business calculators with more sophisticated features, like an NPV calculator, which uses the concept of discounted cash flow to calculate the net value of future cash flows.