Management Education has been defined as the educational and professional preparation of students for jobs or careers in modern science and technology. Its objectives are the preparation of management graduates for professions that are classed above the skilled and trained crafts but below the scientific or engineering professions
In all sectors of the economy, however, one requires the application of Mathematics. Mathematics is the non-concrete study of topics encircling quantity, structure, space, change, and other properties.
Business Mathematics prepares students and consumers to manage their finances responsibly and profitably by explaining everything they need to know about accounting, economics, marketing, financial analysis and more. Using relevant and authentic applications, business mathematics will help make inflows and outflows of money and commerce make sense, even to the most mathematics-averse individuals.
When it comes to professionals who deal more with capital allocation, such as investment consultants and stockbrokers, understanding investment growth and loss and making long-term financial predictions is a fundamental part of their daily work. Without business mathematics, none of these jobs can function.
For those who own businesses, business mathematics is even more important. Business mathematics can help these individuals to be successful by providing them with solid understanding of how to manage goods and services to juggle discounts, markups, overhead, profits, inventory management, payroll revenue and all of the other complexities of running a business so that career and finance can flourish.The BBA department at JIMS VK-II makes sure that students learn the maths behind the business process before stepping into the commercial world.
Role of Business Mathematics in Business
Business is always surrounded by challenges which need to be dealt with properly so that they do not arise in future. These problems that occur daily can be effectively solved with the help of mathematical models. Hence mathematics not only helps to calculate but also analyze business problems and work on them. Mathematics is an important part of managing business. Hence the introduction of a branch of mathematics is called Business Mathematics and is taught as a subject in BBA.
Use of Business Mathematics in Business
To know a business, requires skill more than developing a product or providing a service. If a business has to survive and succeed, it needs to look after the finances and make necessary arrangements for it to prosper as well. Understanding business mathematics is very important to maintaining profitable operations and accurate keeping of records. It is required right from the start for pricing products/services till the end when we need to check if the budget was met. Anybody who masters the art of numbers is valued above the others in the corporate world. BBA has had some of the best placements on account of the mathematical aptitude possessed by the students.
Profit Measurement
These require determining the net profit by subtracting the operating costs from the total amount of sales/revenue during a period. What also needs to be deducted are the tax, depreciation, and discount expenses. This helps to find out if the products are being charged enough to contain the business operation and expand.
Financial Analysis
Financial analysis refers to an assessment of the viability, stability, and profitability of a business, sub-business or project. Therefore, to read the revenue and expenses of a business if we need to analyze the financial health of a business. We need to do a sensitivity analysis of how an increase or decrease in sales figures or price could affect the business. It helps in determining how the business would be affected. Using business mathematics helps in making these interpretations and takes the business to a higher level.
Topics Covered in Business Mathematics
Economics, Accounting, and Consumer Mathematics subjects to be taught in a business mathematics course include Simple and Compound Interest, The Time value of money, Future and Present Value of Money, Annuity, Future and Present Value of Ordinary Annuity, Depreciation, Discounts, Profit and Loss, Rates, Taxes, Brokerage, Insurance, Bankruptcy, Foreign Currencies–Exchange, Cash Flow, Pay Back Period, Discounted Cash Flow Techniques, Discounted Pay Back period, Investment Appraisal Techniques, Net Present Value Techniques, Internal Rate of Return, Investments and wealth Management – Loans, Mortgage Finance/ Amortization, Product Inventory, Statistics, Cost Function- Maxima and Minima, Applications of Differentiation and Integration to Business: Demand Function, Supply Function, Cost Function, Profit Function, Elasticity of Demand, Supply and Equilibrium Price etc.
Business mathematics as a unique branch of mathematics is used by commercial enterprises to record and manage business operations. Commercial organizations use mathematics in accounting, inventory management, marketing, sales and forecasting, and financial analysis. Hence, Business Mathematics include Business Statistics which has great impact in preparing students studying for the award of a Management Degree from Jagannath Institute of Management Sciences for the development of relevant skills and knowledge specifically in Business as stipulated in the aims and objectives of establishing a management institute in India.
Dr. Prabal Chakraborty
Department of Management