Mathematics, Algebra and Geometry and its Place in Business

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A business can be defined as an enterprise or an organizational entity engaged in commercial, industrial, or even professional activities. A business can be either a non-profit organization that would operate in the fulfillment of a charitable mission or to further its social cause, or a for-profit organization to make money with the selling of a certain good or product. When managing a business, mathematics is everything. Businesses deal mainly with money, and mathematics is used in all transactions of money, and you cannot have a business of profit without knowing how to manage the money. Mathematics can be used to record and manage business operations of a commercial enterprise.

Commercial organizations, use mathematics for inventory management, sales forecasting, accounting, marketing and financial analysis. Mathematics can be used to calculate financial formulas to figure out the tax calculation, hiring rates, salary calculation, measuring interest calculations, and more. Businesses can also include statistics and has the ability to provide a solution to certain problems. There are many challenges that surround a business, and they would have to be dealt with properly as to not arise again in the future. Such problems that would occur can be effectively solved using basic mathematical modules. Mathematics can be used to calculate and analyze business problems, allowing the businesses to fix and correct any of their problems. Mathematics would be the science dealing with the logic of quantity, arrangement and shape.

Math is used all around us on a daily basis, and is even used in almost every aspect of our daily lives. It is the building blocks of everything we do, including architecture, art, engineering, money, mobile devices, and sporting events. Ever since mathematics was discovered, it has been at the forefront of society, and can be seen being used even in the most uncivilized of cultures. When tribes used to use math to calculate sun positioning and master the physics of the hunt. Once civilizations started to develop, mathematicians started to begin work with geometry, geometry is the ability to compute areas, and the volume to make angular measurements, geometry also has many practical applications. Geometry goes hand in hand with algebra, algebra gave civilizations the abilities to divide a family’s inheritances and a way to allocate resources. Mathematicians would use algebra to solve linear equations and systems, it can also go into positive and negative solutions. Early civilizations like the Greeks, developed a model of abstract mathematics using geometry. Since Greece had such a complex and incredible architecture, along with a complex government system, they were the model of the mathematic achievement until the modern times.

Many commercial organizations will use many aspects of mathematics, including accounting, marketing, sale forecasting, inventory management, and financial analysis. It uses financial formulas for interest calculations, salary calculations, tax calculations, and internal hire rates. Accounting is a process of recording all financial transactions pertaining to the business. The process will include analyzing, summarizing, and reporting transactions to the oversite agencies, tax collection agencies, and regulators. Accounting uses these statements as a summary of all financial transactions over the accounting period, summarizing its financial position, cash flow, and company operations. Marketing is a way for the company to promote the buying or the selling of the product made by that company. Marketing is to include advertising, selling,


and delivering products to other businesses or consumers. Math would be used to calculate the cost of the marketing done by the company. When businesses use sales forecasting, they are using a process to estimate the company’s future sales. Having accurate forecasts will enable a company to make informed decisions and possibly predict the companies short and long term performance. These can be based on the past sales data, economic trends, and industry wide comparisons. Inventory management is crucial in a business, it supervises the flow of goods that the company manufactured to the warehouses and from the warehouses to the point of sales. Inventory managers are in charge of the non-capitalized assets and stock items. It is crucial to keep exact number calculations of product being brought in and product being sold, as to let the company know when the stock is low enough for another shipment or not. Financial analysis is a process to evaluate budgets, projects, businesses, and other finance-related transactions which will determine company performance and suitability. The financial formulas a business use are very important, they qualify as such when it gives the business the correct results and answers to questions, which will provide structure and organization. Some common formulas are; simple interest [I=Prt] P is the principal, r is the interest rate, and t is time in years. Compound interest, . P is the principle, r is the rate, n is the compounding’s, and t is the years. And an effective rate, r is the interest rate and n is the compounding’s. Salary calculations are used by businesses to calculate the amount of money they will pay each employee by multiplying the numbers of hours an employee works in a week by the hourly wage determined by the company. Then multiply that number by 52, which is the number of weeks in a year. If an employee was making $30 an hour and worked 44 hours a week, your annual salary will be $30x44x52, or $68,640 annually. Calculating taxes for a business would be taking the companies yearly earned income and subtracted deductions and credits to get the taxable income. Whatever the income is at that point will put the business in a certain tax bracket, each tax bracket is different and corresponds with a specific tax rate. You multiply your tax rate and your taxable income to determine what the company owes the IRS. Calculating the hiring rate is determined by the amount of internal hire a business is making during a set period. This metric will cover all the employees that have switched positions inside the organization. To figure this out, you divide the number of internal hires by the average number of employees at the company. Business statistics is based on the science of a good decision made when faced with uncertainty and is used in disciplines such as econometrics, auditing, operations, and production, which would include marketing research and service improvement.

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Mathematics is the inclusion of topics such as structure (algebra), quantity (number theory), space (geometry), and mathematical analysis or change. Mathematicians find patterns in order to formulate a new conjecture. They use mathematical proof to resolve truth or falsify a conjecture. Mathematical reasoning is used to provide insight or predictions as long as mathematical structures are good models of real phenomena. When using logic and abstraction, mathematicians have developed calculations, counting and measurement. Along with a way to study the motions of physical objects and shapes. As far back as we can go with written records, mathematics has been used by humans in their daily lives. Mathematics can also be linked to exploring other fields such as logic, and the set theory, or even the study of uncertainty.

In order for a company to earn money and succeed, be it a service company, a manufacture, or a retailer, they need to create profits. In order to generate profit, a company has to make sales to customers that exceed the amount it cost to make the product. There are three components to earning profits, the cost of sales, revenues, and other types of expenses. Using this, the company can calculate and compute a net income. The cost of sales is how much it cost to make and manufacture the product produced by your company. For instance, say you want to sell a bottle of beer for $6.00.

First take a look at what goes into making beer, you need malt, water, hops, and yeast. With all the ingredients consider how much each would cost to brew beer, on average it would cost you about $2.00 to brew one bottle of beer, so you would have a profit of $4.00. But that would be a very expensive bottle of beer, for most company’s, a six-pack of bottles will run you about $10, and the average cost to brew a bottle would be .75 cents. So if you take the .75 cents multiply it by 6, it would cost $4.50 to produce a six-pack, when sold at $10.00 per six-pack you subtract the cost to manufacture by the cost of sale and you have a profit of $5.50 per six-pack of beer. Revenues are inflows from a consumer, they are the actual amounts your customers give you, or promise to give you, the term sales is just a synonym for revenues. The only caveat to this is a company can’t record revenue until they know the actual price and has the assurance that the customer is willing to pay it.

A few examples would be a bakery making treats and selling them to the customers for revenue, or a clothing retailer revenues from selling clothing to fashionable consumers, or even an airline company whose revenues come from ticket sales, along with the horrible baggage fees, carry-on fees, boarding fees, late arrival fees and paying for food once on the airplane. Other types of expenses are in the operating component such as research and development, which is the cost of finding and advancing new technologies needed to create new products by the company. Selling, general, and administrative expenses, such as sales commissions and managerial salaries needed to get sales and run an effective company. Income tax expense, which is the portion of the profits used to pay the government, and interest expense, which is the borrowing of money companies need to pay back to their lenders.

Arithmetic, which is a branch of mathematics that deals with the properties and manipulation of numbers, and can be used by businesses to help determine product pricing, measure profits, and analyze financial health. When determining the price of your product, you must be able to charge enough for your product in order to be profitable. A markup is the difference between the merchandise cost and the price you are selling the product for, this gives you the gross profit. For example, you made a product that cost $10 to produce and you want to markup 35%, you have to subtract .35 from 1 (or 100%) giving you .65 or (65%). Then you calculate the price of the product, dividing 10 by .65, which rounds to $15.38. When measuring business profits, a company has to determine the net profit for a certain time period, they have to subtract returns, operating expenses, and the cost to produce the items. You also have to calculate taxes, depreciation, and any discounts and subtract it from the revenue. Knowing the net profits will help determine if a company is charging enough for their products. It also allows them to determine if they can continue doing business or if they have to grow the business. Analyzing financial health for a business will need a projection of revenue and expenses for the future. This is important so a company can understand the impact to the accounting records if they are changing the numbers to reflect an increase or decrease in sales. This will help a company so they know if they need to expand operations and improve sales.

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A common practice every day in business is math, using math to manage the company’s finances is the backbone of any company. A company should have its own and separate bank account in which to operate with. This account will be used for all transactions and for tax purposes. The management of a balance sheet is foundational. It produces a snap shot of a business and its financials. It would help a business keep track of its capitol and provide cash flow projection. It can help account for all the employees and the supplies. They can track assets, liabilities, and equities. Companies can use Cost-Benefit Analysis (CBA) to track money coming in and out. It can help with maintaining a sustainable balance of profit and loss. Businesses can use CBA to make non-critical choices quick and easy. It can also be used to determine if hiring another employee would be beneficial.

Managing inventory is an approach to sourcing, storing, and selling goods. Inventory management includes controlling and overseeing purchases from the suppliers, and from the customers, managing the storage of stock, order fulfillment, and controlling how much product is for sale. Companies will use programs like Excel, google Sheets, or other manual tools to keep track of the stock inventory, and make decisions about ordering. Having good inventory management will benefit the businesses operations of efficiency and longevity. Having a clear visibility of your stock will allow you to see areas to help reduce cost, and provide better customer service, prevent loss from theft, returns and spoilage, and it helps optimize fulfillment. It can also provide a clear visual of your financial standings, product and business opportunities, customer behaviors and preferences, trends and more. Without the inventory being properly managed, the company could lose out on a large profit.

Economic growth is an increase in the production of economic services and goods, when compared from one period to another. When generating economic growth, there are a few ways a business can go about this. They can increase the amount of physical capital goods in the economy, when you add capital to an economy, it tends to increase the productivity of labor. Second is a method of producing and economic growth in technology. A quick example of this is the invention of gasoline, before this the economic value of petroleum was low, once it was capitalized on, gas became a better and more productive method to transport a company’s goods and or products. Another way to stimulate economic growth is to grow the labor force. More people working will generate more goods and services. Along with that, it is important to have the right workers for the right job to produce the best quality product a company can. The last would be increasing human capital, basically when laborers become really skilled at their profession, their productivity goes up. They can become better at their job through training, practice, trial and error. The money a company will save in training a worker for the long haul will keep a company’s profits high. Plus, you will have a quality product with less rework when you have skilled laborers. If you have laborers who aren’t confident in their job, the company will have a lot of money lost in a bad product.

Math is used in every aspect of a business, it is used to manage business operations, finances, inventory management, taxes, pay roll, hiring rates, financial management, sales forecasting, and much more. For a business to run effectively and efficiently, hiring the right person for the right job is crucial, that include the positions dealing with mathematics. Having a good understanding of economics, and running a business will allow you to succeed as a company in today’s ever growing economy.


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Mathematics, algebra and geometry and its place in Business. (2022, Oct 03). Retrieved June 23, 2024 , from

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