Mathematics plays an integral role in the world of business. Profitability, expected returns, the likelihood and risk associated with certain ventures are all possible to estimate because of the concepts and ideas presented in math. Having a firm understanding of concepts and ideas is essential to achieving success in both life and business
Often times, math is viewed as boring or difficult. Because there are initial struggles with some abstract concepts, many people shrug it off and say things like, “I am bad at math. Who cares about it anyways?” or something along those lines. Apathy here is dangerous. Not only is math not boring, but understanding the concepts presented in the subject are vital to doing well in life.
The cornerstone of mathematics is logic. It allows people to start with what are essentially premises (the ordinal values and what they mean) and combine them to make more complex associations. Furthermore, math is comprehensive. In order to learn multiplication, a person must first understand addition. Algebra expands on these concepts, and calculus on those, so not only are people who are doing high level mathematics learning new material, but continually reaffirming previously learned concepts.
This is most essential in the business world. Think of the basic necessities for a business to run like the ordinal numbers. A person must first learn the meaning of one and two before they can add. Similarly, a person must pay rent for an office, raise capital, get proper licensing, etc. These issues never go away and will remain for the duration the business runs. In addition, new problems will continually arise due to uncertainty, building on these previous issues. Running a business is also comprehensive by nature.
A more literal interpretation of mathematics and its importance in business is for the concepts it allows company owners and accounts to calculate and interpret. Return on investment (ROI) is one of these more advanced concepts. Essentially, it allows a person to interpret the monetary reward of an investment as a percentage or dollar amount. Also, it can be used to project future expected earnings on investments that have not been made yet.
Other important mathematical concepts include net present value, depreciation, differentiating between a credit and a debit, etc. These all play a role in balancing the business’ budget, allocating funds for potential ventures, determining which investments are worth keeping that are impossible to understand without a firm grasp of mathematics.
Make sure before starting a business venture to have a firm understanding of basic mathematics. The success of the company greatly depends on how well these concepts are understood and implemented.