It’s very likely that everyone, at some point in their young lives, has questioned the true usefulness and long-term relevance of math lessons. Will I ever really need to know the square root of 64? When will I use the Pythagorean theorem? Why do I need to find the value of “x?”
On the heels of National Small Business Week, and as graduation season heats up, now is as good a time as any to reflect on those pesky math lessons and truly analyze how knowledge + passion = success. a
It goes without saying that even professions not related to finance rely on math. Financial readiness isn’t reserved for investments and planning. It is an all-encompassing commitment to understanding concepts and applying that knowledge to ensure a sound financial footing.
Electricians, architects, engineers, computer scientists, hairstylists and even bakers incorporate some type of math lesson into their everyday business. In short, no one is safe from an algebraic equation.
Experts note that basic business math, for accounting and recordkeeping, is required of every business professional, including those who employ a finance department. And, although some of us begrudge the necessity of higher-level math, the Algebra Project reports that the transition from simple numeric equations to symbolic arithmetic jumpstarts the development of abstract reasoning skills.
“Business Insider” believes business professionals often rely on recognizing patterns, mirroring the color and shape patterns of elementary school, in order to analyze cyclical change. Business Math for Dummies, a business version of the popular series of specialty books, suggests business owners understand interest rates, decimal equivalents, perimeter formulas and angle measurements. And, we believe them. Here are four math lessons business professionals carry from the classroom to the boardroom.
Ratios. Having the ability to calculate a ratio, or find a percentage, is crucial to business owners and executive level professionals. That analysis gives meaning to profit and loss, and provides context to year-over-year change and revenue growth or decline.
Simple subtraction. Professionals are constantly comparing one thing against another. They compare cost, growth, profit and sometimes unfortunately, loss. That’s where simple subtraction comes into play. It’s used endlessly in business, from net-versus-gross calculations to competitive pricing analysis. Of course, business leaders can rely on calculators instead of the macaroni noodles or M&Ms used in the classroom.
Simple addition. From the get-go, business owners employ simple addition to find answers. Addition comes into play while logging inventory, calculating production costs, or even analyzing start-up costs. The applications are endless.
Extrapolation. Taught in higher-level classes, the ability to forecast allows business owners to prepare for change by interpreting the past. A critical understanding of the subject can assist when predicting future sales, which could then influence staffing and pricing. Extrapolation can also play a role in purchasing.
The bottom line: basic math skills help build a foundation for financial readiness, and do play a role in our professional lives.
(Editor’s Note: Rene Almazan is a senior vice president for Vantage West Credit Union, a $1.5 billion financial institution in Arizona, which serves a growing membership of nearly 135,000. Vantage West serves its membership via online channels and branches in Pima, Pinal, Maricopa and Cochise counties. Vantage West offers consumer and business loans, credit cards, and deposit products, as well as retirement accounts and other financial services. Some products and services subject to approval. Certain restrictions and fees may apply. Subject to change. Vantage West is federally insured by NCUA. www.vantagewest.org )