Business Management Calculators
Helping You Optimize Financial Decisions
With handling inventory, compensating employees, conducting gross margin analyses, and more, business owners have plenty of financial calculations to make to manage their companies well. We offer easy-to-use business management calculators to help streamline the process. Click on the plus sign next to the name of the boxes on the calculators for more details.
About Business Management Calculators
These business management calculators can provide you with information you would need when you’re saving to start a business and when you’re focusing on its growth. In addition, we offer free business webinars throughout the year on topics to help you with your finances—see them all here. So, no matter what type of small business you have or its size, we’re here for you. Feel free to reach out or fill out this form if you have any questions
Saving to Start a Business
The two biggest factors in determining how much you need in savings to start a business are startup expenses and monthly expenses. With this calculator, you’d need to enter how many months’ worth of expenses you want to cover through your savings (before you can pay them through business revenues). For the business savings plan section of the calculator, enter your current savings and input the following: monthly savings, months to save, the rate of return, and marginal tax rate. The calculator will show you how much money you would have saved in the designated time and how much more, if any, you’d need to save to reach your goals.
The Value of Your Business
You may need to know the value of your business for a variety of reasons, such as to acquire investments or loans, to protect it for taxes or legal challenges, to sell it, etc. In general, it’s good to know its value so you know where your business stands now and to plan better for its growth.
With this calculator, you’d input your annual earnings (before taxes/interest), excess compensation, annual growth rate, years of earnings, cost of capital, and marketability discount. This calculator would then provide you with an estimated present value of the business and a discounted value with marketability taken into account.
Sales Volume Required to Break Even
Simply put, breaking even means the total cost and total revenue are equal. The first time your business breaks even means you’ve reached a significant milestone and cause for celebration! From there, it’s about going beyond that break-even point on a monthly basis.
The break-even point formula looks like this:
Break-even point (units) = fixed costs ÷ (sales price per unit - variable costs per unit)
With this calculator, you’d enter your fixed costs per product, variable costs per product, price per unit, and unit sales. You’d then see the sales volume of units you’d need to break even.
Business Inventory Requirements
To keep customers happy, businesses need to ensure that they have sufficient stock on hand to meet their demand plus extra (safety stock level) in case demand exceeds that expectation—a tricky balance to maintain. With this calculator, you’d need to enter your company’s annual growth rate, starting inventory, starting weekly demand, safety stock level percentage, and order lead time in weeks to see your business’s yearly inventory requirements.
Determine Your Working Capital Requirements
Having enough working capital means you have enough liquid funds to pay employees, suppliers, and other overhead costs. This calculator looks at the working capital requirements by month. Enter your annual growth rate, current ratio target (between 1.5 and 3), current assets (cash, money owed to you), and current liabilities (debt and money you owe). The calculator will then show how much you’d need in working capital to meet your ratio target and by how much, if applicable, this will need to be increased.
Gross Margin Analysis
Here’s where you can enter the sales volume, selling price, and costs of goods sold for up to six products. The calculator will then summarize the average sales price, average cost of goods sold, average gross profit, and gross margin percentage. This can help you see how price points and product costs contribute to your business finances.
Accounts Receivable Analysis
If you’re waiting on money that a customer owes you (for products or services you’ve delivered), that money goes into the accounts receivables category. But for your business to succeed, you don’t want that money to be in limbo for too long because you’ve got bills to pay. This calculator will help you determine your receivables turnover ratio (the higher, the better), the sales to accounts receivable ratio, and the average collection period.
Total Employee Compensation Package
Hiring and retaining employees often become more achievable by offering benefits. This calculator will factor in annual wages, insurance benefits, retirement benefits, and fringe benefits, if applicable, so that you’ll see that total employee compensation breakdown. Knowing these amounts and percentages can help with budgeting for those extra costs.
Frequently Asked Questions
The answer will depend upon how much you’ll need in startup expenses plus the number of months’ worth of ongoing expenses you’ll want in savings ahead of time. You can use these funds to cover business expenses before your company generates the revenue to protect them. Startup costs can include equipment to operate your company, office furnishings, initial inventory and supplies, and so forth. Operational expenses are continuous ones such as rent, utilities, employee salaries, and others. You can use our “Saving to Start a Business” calculator to get figures for your plan.
You’ll find several ways to estimate what a business is worth. One of the more traditional ways to value a business is the discounted cash flow approach, which looks at the current income and projected income to determine its present value. The calculator “The Value of Your Business” uses this approach. This valuation is useful to provide others with an idea that if the business is a worthwhile investment. The downside of this approach is that it uses estimates and can’t quantify all future factors (economic status, technology, threats, etc.).
The components of a break-even analysis are sales revenue and costs (fixed and variable). Once the revenue equals costs, then the business has reached the break-even point. The goal for a business isn’t just to break even, but to generate profit by going beyond the break-even point, which means your sales revenue exceeds both variable costs and fixed costs. Use our “Sales Volume Required to Break Even” calculator for a break-even analysis.
If you sell products to customers, it’s always a good idea to keep track of your inventory to ensure you have enough supply to meet demand. After all, happy customers usually lead to more sales, often thanks to repeat business and referrals. On the other hand, you don’t want to tie up your company’s assets with products that are sitting on shelves, especially if their value depreciates or expires. So, it’s important to figure out the optimal amount of inventory to have on hand so that you can meet demand and restock before supply runs out. To calculate what might be right for your company, use our “Business Inventory Requirements” calculator.
Current Assets – Current Liabilities = Working Capital. To determine if your working capital is enough, divide your existing assets by current liabilities to arrive at your current ratio. A typical ratio target would be between 1.5 and 3.0, but between 1.2 and 2 is ideal. If it’s below 1.2, this means that your business may struggle to pay the bills. If it’s above 2, you’ll likely need to reassess how you’re using your assets. Calculate yours with our “Determine Your Working Capital Requirements” calculator.
The information provided by these calculators is intended for illustrative purposes only and is not intended to represent actual user-defined parameters. The default figures shown are hypothetical and may not be applicable to your individual situation. Be sure to consult a financial professional prior to relying on the results.