Simple maths

“…I would have, but I’m not very good at maths”. How many times have we heard that?  I love quadratic equations and differential calculus as much as the next guy…

Good news bulletin: Simple Maths rules the business world.

If you’re familiar with the following symbols you’ve got all the number skills you need.

+         –           x          /           %         <          >

You only need grade school math. But, you’ve got to be quick with your numbers, know which ones matter, understand industry averages and which ratio’s to look for – top of mind. The most important of all these symbols is %.

Everything that matters is represented as a percentage:

Gross margins

Net margins

Rates of interest

Return on investment

Price earnings ratios

Growth rates

Quick ratios

Debt to equity

Get to know your key financial indicators. Simple tools used on the share market are your best friend even for a small start up. Fundamental analysis is always based on ratio analysis.

Your company will only ever be what it earns and remember these two things that entrepreneurs often forget:

– Revenue must exceed expenditure

– The crocodile always gets the biggest piece!

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