The Importance of Basic Math in Business

by Carol Deeb

Related Articles

• 1The Importance of Statistics in Management Decision Making
• 2Importance of Studying Sociology in Business
• 3How to Calculate the Cost of Sales
• 4Principles and Importance of Accounting for a Business

Business ownership requires more than skill in creating a product or talent at providing a service. Overseeing the finances of your company is key to survival and success. Understanding basic business math is necessary for profitable operations and accurate record keeping. Knowing how to add, subtract, multiply, divide, round and use percentages and fractions is the minimum you need to price your product and meet your budget. If math is not your strength, partner with someone who can take over that role or hire a trusted employee to help your operation stay in the black and grow responsibly.

Calculate Production Costs

Before you formally establish your business, you must estimate the cost to manufacture or acquire your product or perform your service. Adding all expenses associated with making or buying items helps you realize if you can be competitive with other companies and profitable enough to sustain your business and make a reasonable income. In addition to the standard costs of production, such as materials and machinery, add accompanying expenses, such as shipping, labor, interest on debt, storage and marketing. The basis to your business plan is an accurate representation of how much you will spend on each item.

Determine Pricing

To ensure you can operate your business and produce enough cash flow to invest into your enterprise, you must charge enough for your product to be profitable. Markup is the difference between your merchandise cost and the selling price, giving you gross profit. If your operations require a large markup, such as 70 percent, you may not be competitive in your industry if other companies sell the same items for less. Once you have determined your markup, one way to calculate the retail price is to divide using percents or decimals. For example, if a product costs $10 to produce and your markup is 35 percent, subtract .35 from 1 (or 100 percent), which gives you .65, which is 65 percent. To calculate the price of your product, divide 10 by .65, which rounds to $15.38.

Measure Profits

If you want to determine the net profit for a certain time period, you will need to subtract returns, costs to produce an item and operating expenses from your total amount of sales, or gross revenue, during that time. Discounts on products, depreciation on equipment and taxes also must be calculated and subtracted from revenue. To arrive at your net profit, add any interest you earned from credit extended to customers, which is reflected as a percent of the amount each person owes. Your net profit helps you understand if you are charging enough for your product and selling an adequate volume to continue to operate your business or even expand.

Analyze Finances

To analyze the overall financial health of your business, you will need to project revenue and expenses for the future. It's important to understand the impact to your accounting records when you change a number to reflect an increase or decrease in future sales. Estimating how much an employee affects revenue will indicate if you can afford to add to your staff and if the profits realized will be worth the expense. If a competitor starts selling a cheaper product, you may need to calculate the amount by which your volume must increase if you reduce prices. You may need to know if you can afford to expand your operations to improve sales. Using basic business math to understand how these types of actions impact your overall finances is imperative before taking your business to the next level.

The Importance of Basic Math in Business

by Carol Deeb

Related Articles

• 1The Importance of Statistics in Management Decision Making
• 2Importance of Studying Sociology in Business
• 3How to Calculate the Cost of Sales
• 4Principles and Importance of Accounting for a Business

Business ownership requires more than skill in creating a product or talent at providing a service. Overseeing the finances of your company is key to survival and success. Understanding basic business math is necessary for profitable operations and accurate record keeping. Knowing how to add, subtract, multiply, divide, round and use percentages and fractions is the minimum you need to price your product and meet your budget. If math is not your strength, partner with someone who can take over that role or hire a trusted employee to help your operation stay in the black and grow responsibly.

Calculate Production Costs

Before you formally establish your business, you must estimate the cost to manufacture or acquire your product or perform your service. Adding all expenses associated with making or buying items helps you realize if you can be competitive with other companies and profitable enough to sustain your business and make a reasonable income. In addition to the standard costs of production, such as materials and machinery, add accompanying expenses, such as shipping, labor, interest on debt, storage and marketing. The basis to your business plan is an accurate representation of how much you will spend on each item.

Determine Pricing

To ensure you can operate your business and produce enough cash flow to invest into your enterprise, you must charge enough for your product to be profitable. Markup is the difference between your merchandise cost and the selling price, giving you gross profit. If your operations require a large markup, such as 70 percent, you may not be competitive in your industry if other companies sell the same items for less. Once you have determined your markup, one way to calculate the retail price is to divide using percents or decimals. For example, if a product costs $10 to produce and your markup is 35 percent, subtract .35 from 1 (or 100 percent), which gives you .65, which is 65 percent. To calculate the price of your product, divide 10 by .65, which rounds to $15.38.

Measure Profits

If you want to determine the net profit for a certain time period, you will need to subtract returns, costs to produce an item and operating expenses from your total amount of sales, or gross revenue, during that time. Discounts on products, depreciation on equipment and taxes also must be calculated and subtracted from revenue. To arrive at your net profit, add any interest you earned from credit extended to customers, which is reflected as a percent of the amount each person owes. Your net profit helps you understand if you are charging enough for your product and selling an adequate volume to continue to operate your business or even expand.

Analyze Finances

To analyze the overall financial health of your business, you will need to project revenue and expenses for the future. It's important to understand the impact to your accounting records when you change a number to reflect an increase or decrease in future sales. Estimating how much an employee affects revenue will indicate if you can afford to add to your staff and if the profits realized will be worth the expense. If a competitor starts selling a cheaper product, you may need to calculate the amount by which your volume must increase if you reduce prices. You may need to know if you can afford to expand your operations to improve sales. Using basic business math to understand how these types of actions impact your overall finances is imperative before taking your business to the next level.

Ways to practice maths

15 Fun Ways to Practice Math

“Let’s practice math facts!” That is what your students will say once you introduce some of these fun ideas and games to the classroom. When you create a strong love and appreciation for math at an early age, you’re setting […]

Stacy Tornio on January 15, 2016

Brought to you by Simple Solutions Mathematics

“Let’s practice math facts!”

That is what your students will say once you introduce some of these fun ideas and games to the classroom. When you create a strong love and appreciation for math at an early age, you’re setting kids up for a successful future.

Between playing bingo, baking in the classroom and even bringing in a little blast from the past, you’ll have students begging to do more math.

1. Roll the dice.Dice can be used in so many different ways when it comes to math. Whether you’re practicing multiplication facts or fractions, try having students create their own math problems with the roll of the dice. They can create fractions, simple multiplication problems or even word problems using dice. This can also be a fun way to put together a homework assignment: Students roll the dice during class, then take the problems home to solve.

2. Play math bingo.Bingo is always a class favorite, and you can play it with any number of students. You can buy math bingo kits online (or win your own in our “I Love Math” Classroom Giveaway). You can also make up your own. The way it works is students have to solve math problems in order to know what number to mark off of their sheet.

3. Find fun ways to teach multiplication.Lucky for you, we have 22 fun, hands-on ways already gathered right here. You can use Cheerios, cards, dominoes and many other ideas. Students will love practicing their facts with these ideas.

4. Turn regular board games into math games.Pretty much any game that involves numbers can be turned into a way to practice math. Yahtzee is an easy example: As you’re rolling the dice, have students ask one another math questions based on the numbers they roll. Even the card game Uno can help with practicing math. Have students add, subtract, multiply and divide based on the the numbers on the cards.

5. Play War.The classic card game War is always a good way to reward students when they have a few extra minutes here and there. Have several decks of cards in your classroom and use this as an incentive, either when they finish assignments or just as “bonus” time that they can earn. Make sure they are solving math problems when they lay their cards out, though.

6. Go online.You can find lots of free math games online, and students will love this break in the day! Some of our favorites are Sushi Monster, Aplus Math, Prodigy, Mathville, Math Cats and Math Playground. There are so many out there, so take some time to really explore this vast online world.

7. Make your own deck of cards.While playing War and making math questions out of the cards is fun, you can also take it to the next level by creating your own math problems on playing cards. Just take an old deck of cards and cut out pieces of paper that will cover each card entirely. Then create your own math or word problems. By covering the entire card, you’re really just using the card as a template. You could also make cards out of poster board or recycled cereal boxes. But this method is great because they all fit nicely into the card box, making for easy and portable storage.

8. Make a recipe.When you have to follow a recipe—especially when you have to adjust the recipe—there’s a lot of math involved in making sure you get it right. Put those skills to the test by making no-bake cookies or even slime. For more of a challenge, have students double, triple or even quadruple the recipe.

9. Borrow or buy an adding machine.Do you remember the simple joy you had when playing around with an adding machine? If not, go to your nearest thrift store to find one! Students will love being able to punch in numbers and have the math problems come out on real paper. It’s a simple yet awesome way to get them excited about practicing math.

10. Download Sudoku and Kakuro puzzles.Sudoku is definitely a good way to practice math, and you can find puzzles, books and samples all over the place. Not as many people know about Kakuro puzzles though. They are similar to Sudoku in that they come in a grid, but the rules are different. Here’s a good site that explains the game and offers free downloads to play.

11. Download math apps.This is another area where you can find oodles of options. With most schools having access to tablets, this is a great way to make practice fun for your students. Look for math games best suited for your age group (most apps have age recommendations). A few we recommend include Mathmateer, Thinking Blocks Multiplication and Crazy Times Tables.

12. Create a math Concentration game.You know the classic game Concentration? Create your own version using math problems or cutting up old flash cards. Here’s how: Have the math problem on one card and then the answer on another. So you might have 4 x 5 on one card, and then another card would have 20. Have the students find each answer for a correct match. You could even color-code the cards to make it easy to distinguish questions vs. answers.

13. Have a math scavenger hunt.Get ready to be the most popular teacher at your school! Scavenger hunts are already exciting and fun. One clue leads you to another, and then another, until there’s finally a prize at the end. For this scavenger hunt, make math problems the clues. So in order to move on, students have to really think about the problems and give the correct answers. Be sure to make them challenging so the reward (maybe 10 minutes of extra recess) is worth it. We suggest pulling out all your hardest math problems and even dividing up into teams for a little friendly competition.

14. Weave math into other subjects.You know those math problems you created earlier with a deck of cards? You should always have them around, no matter what subject you’re working on. In the middle of social studies, pull out a math card. Or quiz students as they’re lining up to go to lunch. All these little practice sessions can really add up in developing skills.

15. Cut up the worksheet.A piece of paper can be oh-so boring to kids. Try cutting up the math worksheet you were planning to give your students. Fold up the various problems and put them in a box. Then let each student draw one to work on. This is a really simple idea, but it can add just the variety you need.

Ramanujan museum for math

The Ramanujan museum for math

12 AUGUST 2009 NO COMMENT

S Sundaram and Nirmala Raman

PK Srinivasan, or PKS as he was known, was a dreamer with his head in the world of mathematics but feet fi rmly on the ground. He was an ardent admirer and practically a devotee of the Indian mathematical genius Srinivasa Ramanujan.

This is what he wrote in a preface to Volume 1 of the Ramanujan Memorial Number: Letters and Reminiscences he helped publish in 1968; “(the dream is to set up a) Ramanujan Memorial Foundation with the object of setting up a permanent memorial to Ramanujan in the shape of a multistoried building in Madras, housing a planetarium, mathematical exhibition wings, auditorium, library and showrooms displaying applications of mathematics in industry. It will be a house of entertainment par excellence for the layman and it will strive to make mathematics almost as popular as dance and music. We solicit generous support and help from the readers and institutions all over the globe for translation of the dream into reality.”

He had to wait for almost 25 years to atleast have a room for the memorabilia of this great mathematician and finally could accommodate it in the premises of the Avvai Cultural Academy, Royapuram, and the man who helped him realise his dream, at least partially, was Shri A.T.B Bose, a businessman interested in education.

The story of PKS’s fascination with Ramanujan and how he came to collect letters and other memorablia related to Ramanujan and how these came to be housed in the Ramanujan Museum in Chennai is a story worth recounting if only to show the power of dreams and a single-minded devotion to a cause.

PKS was introduced to the life and works of Ramanujan in 1948 through a book on “Indian Scientists’ published by G A Natesan & Co. The life sketch of Ramanujan moved him and created in him a desire to discover more about the genius.

At that time, PKS was working as a mathematics teacher in Muthialpet High School in Chennai. Through his innovative methods of teaching, PKS managed to kindle an interest in mathematics amongst his students.

PKS felt that Ramanujan’s life taught you that it was possible to reach great heights of achievement irrespective of your background if only you are true to yourself. This was something he wanted all his students to realise. He was one of the founder members of the Association of Mathematics Teachers in India (AMTI) in 1965 because of a conviction that mathematics teachers needed to have a professional platform to exchange ideas.

In 1954 PKS met Janaki Ammal and S Thirunarayanan, wife and brother of Shri Ramanujan. Subsequently he also met Ananda Rao, who was a contemporary of Ramanujan in England. He was fascinated listening to the many small and hitherto unknown incidences in Ramanujan’s life. This meeting and subsequent contacts with relatives and friends of Ramanujan encouraged PKS into thinking about collecting letters and reminiscences related to Ramanujan’s remarkable life.

In 1962, the Government of India announced the release of a special commemoration stamp marking Ramanujan’s 75^th birthday on 22^nd December. PKS decided to use this opportunity to bring out a memorial number on Ramanujan, containing letters and reminiscences.

With the help of his students, both former and current, he formed a committee for this purpose in October 1962. They then set about searching for contacts and institutions in India and abroad that who were connected in any way with Ramanujan.

Funny Jokes

…frustrated? trapped? bad mood? I hope these jokes make you laugh, happy and free from stress!

Funny Math Jokes

by STEPHEN on JANUARY 21, 2013 · 26 COMMENTS

in EDUCATION JOKES, JOKES

“Students nowadays are so clueless”, the math professor complains to a colleague.

“Yesterday, a student came to my office hours and wanted to know if General Calculus was a Roman war hero…”

A mathematician organizes a raffle in which the prize is an infinite amount of money paid over an infinite amount of time.

Of course, with the promise of such a prize, his tickets sell like hot cake.

When the winning ticket is drawn, and the jubilant winner comes to claim his prize, the mathematician explains the mode of payment: “1 dollar now, 1/2 dollar next week, 1/3 dollar the week after that…”

A math student and a computer science student are jogging together in a park when they hear a voice: “Please, help me!”

They stop and look. The voice belongs to a frog sitting in the grass.

“Please, help me!” the frog repeats. “I’m not really a frog: I’m an enchanted, beautiful princess. Kiss me, and the spell will be broken – and I will be yours forever…”

The CS student picks up the frog and examines it carefully from all sides – making not even an attempt to kiss it.

“You don’t have to marry me”, the frog continues frantically, “if you’re afraid of the commitment. I’ll do whatever you wish me to do if you just kiss me…”

The frog’s voice is silenced, when the CS student puts the animal into the right pocket of his pants.

“But why don’t you kiss her?!” the math student asks.

“You know”, the CS student replies, “I simply don’t have time for a girlfriend – but a frog that talks makes a really cool pet…”

A visitor at the Royal Tyrell Museum asks a museum employee: “Can you tell me how old the skeleton of that T-Rex is?”

“It is precisely 60 million and three years, two months, and eighteen days old.”

“How can you know that with such precision?!”

“Well, when I started working here, one of the scientists told me that the skeleton was 60 million years old – and that was precisely three years, two months, and eighteen days ago…”

“Divide fourteen sugar cubes into three cups of coffee so that each cup has an odd number of sugar cubes in it.”

“That’s easy: one, one, and twelve.”

“But twelve isn’t odd!”

“It’s an odd number of cubes to put in a cup of coffee…”

A mathematician gives a talk intended for a general audience. The talk is announced in the local newspaper, but he expects few people to show up because nobody who is not a mathematician will be able to make any sense of the title: Convex sets and inequalities.

To his surprise, the auditorium is crammed when his talk begins. After he has finished, someone in the audience raises his hand.

“But you said nothing about the actual topic of your talk!”

“What topic to you mean?”

“Well, the one that was announced in the paper: Convicts, sex, and inequality.”

At the end of his course on mathematical methods in optimization, the professor sternly looks at his students and says: “There is one final piece of advice I’m going to give you now: Whatever you have learned in my course – never ever try to apply it to your personal lives!”

“Why?” the students ask.

“Well, some years ago, I observed my wife preparing breakfast, and I noticed that she wasted a lot of time walking back and forth in the kitchen. So, I went to work, optimized the whole procedure, and told my wife about it.”

“And what happened?!”

“Before I applied my expert knowledge, my wife needed about half an hour to prepare breakfast for the two of us. And now, it takes me less than fifteen minutes…”