Mathematics is an optional subject in commerce but it is equally important for the students. Business and mathematics are the co-related terms as business deals with money and mathematics deals with its calculations.
Managing money is a necessity for every individual to take effective decisions which require the knowledge of mathematics. For the management of the operations in business and to keep its record, the commercial enterprises use the mathematics. The mathematics is used in accounting, marketing, financial analysis, inventory management and sales forecasting.
You can know the formulas, measurements and fractions involved in the calculation of interest. It would also provide you with the knowledge of tax calculation. There are certain challenges that the businesses have to deal with to avoid them in future. The mathematical models can help in the calculations but also analyse the business problems.
USES OF MATHEMATICS
A certain set of skills is required to manage a business or for the development of the product or delivering a service. The business has to take care of the finances for its survival and success. Business mathematics plays an important role in maintaining profitable operations and keeping an appropriate record. With the commencement of business, mathematics come into the role, and it goes till the end.
Here are some of the important situations which require business mathematics:
Calculation of production cost
The commencement of the business requires the estimation of the cost that would be incurred in manufacturing, procurement of machinery, rental cost, other expenses etc. The company bears some additional expenses also such as repayment of loans, interest, advertisement cost, interest rates etc. The accurate determination of the cost would help in making a strong base for the business.
Determination of price
After the calculation of the total costs, the accurate pricing of the products is the next step. It helps in the generation of the required amount of the cash flows. The prices should be according to the cost incurred so that the product becomes profitable.
Measuring the profit
Then, the net profits are calculated by deducting the operation cost from the total sales. Other deductions are tax, discounts, depreciation etc. It helps to know if the cost charged would be profitable for the future operations of the company.
The financial health of the business is analysed through the projection of revenue and expenditure. A minor change in the figure of sales and pricing have an impact on the revenue of the company, and it also analyses the contribution of each employee.
MAJOR CONCEPTS COVERED UNDER MATHEMATICS
Mathematics covers a large number of concepts in it, and they are further divided into various fields. Some of the most important topics are:
The algebraic structures are studied in this concept. It deals mainly with the symbols and the rules for the manipulation of the symbols. The symbols are the representation of quantities not having any fixed values referred to as variables. The relationship between the different variables is studied under it.
Calculus and analysis
Calculus involves the study related to change. It is majorly divided into two parts such as integral calculus and differential calculus. It also studies the inverse relationship between the differentiation and integration.
Geometry is that part of mathematics which deals with the relation of points, angles, lines, surfaces and measurement of different shapes and their properties. In other words, it can be described as the arrangement of the geometric figures.
Number theory is purely related to the study of integers and natural numbers. The positive whole numbers are studied in this which are commonly known as the natural numbers.
Probability and statistics
It is the branch which deals with the calculation of the occurrence of the events. It is measured between 0 and 1. The probability cannot be negative and cannot exceed 1. There are rare events having probability 1 considered as a certainty. It also includes some assumptions. For example, we consider the probability of tossing a coin as 1, as it would be either “head” or “tail” assuming that the coin lands flat.
It is the study of models cooperating and conflicting between the decision-makers who are rational. Game theory is majorly used in the areas such as computer science, psychology, political science, economics etc.