Essential Finance Formulas Every Business Administrative Assistant Should Know

Business administrative assistants play an essential role in daily operations, requiring basic math knowledge to support office-based activities related to budgeting, scheduling, and organizing. You don’t have to be that whiz in mathematics staff, but having some basic and essential formulas will help you become efficient and confident in performing your tasks. This blog will give some of the most valuable formulas every business administrative assistant needs to learn.

Basic Addition and Subtraction

Addition and subtraction are the most essential formulas you need to consider. These simple mathematic operations are widely used when working with numbers like invoices, budgets, and time calculations.

For example:

Addition: You will add the numbers if you need to add some expenses or sales.

Example: If the expenses were $150, $200, and $250, the total would be 150 + $200 + $250 = $600.

Subtraction: You subtract your expenses to calculate how much money may remain after spending from the total of your income or budget.

Example: Suppose your total income is $1,000, and you have spent $600; the remaining balance will be $1,000 – $600 = $400.

These simple formulae will help with expense recording, budget management, and account balancing in daily practical life.

Budgeting with Multiplication and Division

You will very often work with budgets and financial reports. The processes of multiplication and division have to be utilized throughout when considering the budget setting and identifying how much a resource or material would need to be available.

Formula for Multiplication: Find the total cost or the number needed when you know the per unit cost or number of items.

Example: If you have to buy 50 boxes of paper, each costing $20, you multiply 50 times 20 to get your total cost.

50 * $20 = $1,000

Division: If you need to distribute the budget in various ways, either towards different projects or to be allocated amongst people, then division is the key formula.

Example: Suppose you had a total of $5,000 for funding and needed to distribute that money among five departments: you would divide $5,000 by 5, the number of departments, and indicate an answer of the share per department.

5,000 / 5 = $1,000

Knowing your multiplication and division will help you do things like the cost of projects, office supplies, or dividing resources quickly in your head.

Calculating Percentages

Percentages are vital in administrative applications, ranging from the computation of discounts to those of taxes or commissions. A rate is no more than a way of expressing a number as a fraction of 100.

To find a percent of a number:

Example: Say you want to approximate 10% of $200:

• 10% of $200 = 200 *.10 = $20

To find what percent one number is of another:

Example: To find what percent $25 is of $200:

25 divided by 200 equals 0.125.

0.125 * 100 = 12.5 %

As a business administrative assistant, you must know how to find percentages that will help you calculate tax, determine discounts, or know commission rates.

Formula on Time Management and Scheduling

Everything from scheduling meetings to utilizing time effectively falls under an administrative assistant’s role. To do this, you apply some simple formulae of time involving conversion either between hours and minutes or some time needed for any particular activity.

Converting Time: Sometimes, you’ll want to convert hours into minutes or vice-versa. To convert hours to minutes, multiply by 60. 

Example: If some meeting lasts 3 hours, you multiply three by 60, and voilà, you find out it will last 180 minutes.

3 hrs × 60 = 180 minutes.

You will divide the minute amount by 60 when converting minutes to hours. 

For example, if something takes 240 minutes, you divide 240 by 60, which would come out to four hours.

240 minutes ÷ 60 = 4 hours

Time Between Two Events Calculation: If you want to get the time between two events, you must subtract the start time from the end time.

Example: If a meeting runs from 9:00 AM to 11:30 AM, subtract the beginning time from the ending time.

11:30 AM – 9:00 AM = 2 hours 30 minutes.

These are time formulae to help manage schedules, plan meetings, and calculate the required time to do some particular work.

Computation of Profit and Loss

Knowing how to compute profit and loss is essential if your responsibility involves managing budgets or finances. These formulas will allow you to identify whether the company is profit-making or losing money based on income and expenses.

To calculate the profit:

• Profit= Income- Expenses

Example: If your company made $2,500 in sales and spent $1,500 on costs, it would have a profit of $2,500-$1,500 = $1,000.

How to calculate loss:

Loss = Expenses-Income (when expenses exceed the income level)

Example: If the company’s sales were $1,000 and its costs were $1,500, it would have an accounting loss of $1,500 – $1,000 = $500.

A business administrative assistant must learn how to compute the profit and loss, enabling you to make wise financial decisions and monitor your company’s performance.

Formula for Inventory Management 

You may need to keep an inventory if you work in an office or business that deals in a product. The inventory formulas will aid in knowing how many stocks you have on hand, understanding demand, and reordering items if needed. 

Inventory turnover: This formula shows how often inventory was sold and replaced during the given period. 

Inventory Turnover Formula = COGS / Average Inventory

Example: Given goods sold cost $12,000 and the average inventory is $3,000, the inventory turnover would be: $12,000 / $3,000 = 4 

This formula helps the business to know at what speed the goods are selling and when to re-supply.

Conclusion 

This overview of key formulas will help you carry out your work as a business administrative assistant. Whether budgeting, schedules, proving profit, or inventory management, math plays a role in every activity. These formulas will help you comprehend how to do these tasks and give you confidence and ease while carrying out activities. So, if you’re ready to start your career as a Business Administrative Assistant, enroll at Northwest Career College today. Our flexible programs cater to your needs and enable the development of skills within you that are necessary to conduct your work in this speedy yet rewarding career.