Importance of Mathematics in Business

by admin | June 28, 2019 2:50 pm

Maths plays an important role in our daily lives. It’s just not useful in academics but also it has many applications in various fields such as engineering, medical, education, business, etc. Mathematics and Business go hand in hand. Business deals with revenue or money and money encircle around the calculations based on different factors. In Math, we deal with all type of numbers present in the number system, but in business, we deal with only real numbers[1], which directs us towards the profit and loss occurred in business.

Even in Business Studies, students have been taught with the basic fundamentals of maths. These basic arithmetic skills include addition, subtraction, multiplication, division, calculation of areas, volumes, length, weight, temperature, etc. All these concepts have been taught with the help of examples based on business queries so that students can get the knowledge of using these skills at various levels.

Business includes subdivisions, such as banking, finance, taxes, stocks and loans. In banking, calculations are done in broad aspects. Because there are a number of computations which includes arithmetic operations. Also, there are multiple banking entrance exams conducted which requires logical skills to score and pass the cutoff ranking. Employees of banks have a good grasp on mathematical skills and they are able to do calculations in fractions of seconds.

Business includes multiple types of taxes like professional tax, income tax, service tax, corporate tax, Value added tax(VAT), capital gains tax, etc. And for all these taxes, there are different formulas to conclude them, such as income to price ratio, rent to price ratio, back to front-end ratio, etc. Taxation is a little typical one to formulate but once you get to understand how to scale, it becomes very handy.

You must have learned about factors of a number[2] in Maths, but have you heard the concept of factoring in business. Factoring is majorly used by the organisation that have large volumes of business-to-business sales on credit. Basically, factoring services are not conditioned upon the credit rating of the company that is selling its invoices. In fact, the rating of the buyer is risky. This allows new companies and businesses with poor credit ratings to raise money using factoring.

These are the general uses of Maths logics and fundamentals in business. But once you are through to a business, you will come across many applications of mathematical concepts.

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Endnotes:
  1. real numbers: https://byjus.com/maths/real-numbers/
  2. factors of a number: https://byjus.com/maths/factors-of-a-number/

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