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Business Mathematics

Last updated date: 19th Apr 2024
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Mathematics is considered to be the study of numbers, shapes & patterns and when this discipline is applied in a business, it becomes Business Maths. For a business, it is a vital subject that a student has to deal with. It acts as a tool that helps in solving and controlling various business problems. The basic objective to learn this subject is to adapt the knowledge of various mathematical tools and techniques and models which helps in dealing with real-life business situations. It is also referred to as "commercial mathematics". In this article, we will talk about this particular subject ie. Business Mathematics. What does it mean, what are the various topics included in this, the importance of learning mathematics for business along with its scope? 

What is Business Mathematics?

This is the discipline that consists of mathematical concepts related to the business and it is not only limited to cost, profit/loss, and interest. It is beyond these basic concepts and includes other mathematical concepts as well. The operations or financial activities are controlled by business mathematics such as control on the cash flows, payroll, revenue, financial analysis, risk analysis, etc. The mathematical formulas help in almost every field of business such as in wage or salary calculation, employee performance management, profit & loss analysis, etc. Mathematical models help in analysing the business problems and finding out the appropriate solutions so that those problems do not arise in the future. It also helps in evaluating the problems and taking appropriate decisions in this regard to simplifying the business processes.

Topics covered in Business Maths

The fundamental topics covered in business maths subject are mentioned below which can be covered from any business maths book:


  • Ratios and Proportions

  • Simple and Compound interest including the application of Annuity

  • Bill Discounting & Average Due Date

  • Mathematical reasoning (basic application)


  • Set Theory &  application of Venn Diagram

  • Variation, Indices, Logarithms

  • Permutation and Combinations

  • Linear Simultaneous Equations

  • Quadratic Equations

  • Determinants and Matrices


  • Constant and variables, Functions, Limit & Continuity

  • Differentiability & Differentiation, Partial Differentiation

  • Derivatives 

  • Maxima & Minima

  • Indefinite Integrals

  • Definite Integrals


  • Statistical Representation of Data

  • Measures of Central Tendency and Dispersion

  • Correlation and Regression

  • Index Numbers

  • Time Series Analysis

  • Probability

  • Theoretical Distribution

Importance of Commercial Mathematics

Business is all about management. Management of each and every aspect related to the business helps it to grow and in this management commercial mathematics plays a huge role.

  • Business maths plays a vital role in creating the base of the business. In a business, it is very important to analyse the costs associated with the production of goods and services such as cost of raw materials, plant & machinery, rent, wages, marketing, administrative expenses, warehousing, interest as well as repayment of loans, etc. Only after analysing all the costs, estimation of profits can be done and in this whole process, commercial maths plays a prominent role.  

  • This particular subject helps in pricing the products and services after analysing all the costs and then in calculating the gross or net profit. This helps in analysing if the business is enough to run all the operations and if they are getting profits from the business or not.

  • This discipline helps in maintaining the good health of the company. It helps in calculating all the business taxes which is also a vital part of the company. Mathematics helps in maintaining this and helps in calculating the actual business profit after deduction of all the taxes & other deductions.

  • Business Maths helps in assessing the financial performance of the business. It helps in estimating the incomes & expenditures along with the risk analysis. It also helps in the assessment of the rivals and their key areas along with their business strategies.

  • This very discipline helps in taking and improving decision making about different aspects of business such as costs, raw materials, marketing, advertising, strategies for the short and long term, etc. It helps in analysing unforeseen situations and making decisions in favour of the company.


Commercial Maths is one of the important disciplines for the commerce stream. It is being taught to the students from school level to college level in different mathematical finance courses or business maths courses or any other courses related to the commerce field. A person needs other skills as well along with knowledge of mathematics such as economics, business studies, accountancy along with good communication skills. The persons knowing this subject can found their career in the following fields:

  • Securities analyst

  • Equity analyst

  • Expenditure analysts

  • Budget Analyst

  • Market Research Analyst

  • Policy underwriters

  • Risk analyst

  • Financial analysts

  • Investment analysts

  • Actuaries

  • Professor

What is the definition of Business Mathematics?

Profit and loss are constantly present in business maths. A product's cost is determined by taking into account its profit, margin, cash discount, trade discount, and other factors. Commercial businesses utilise business mathematics to track and manage their operations. To make a few like Accounts, inventory managers, marketing, sales tally, and financial analysis are all areas where maths is used in commercial organisations.

Topics in Business Mathematics

The following are some of the most essential subjects studied in Business Mathematics:

  • Profit and Loss Statements

  • Statistics

  • Easy and combined interests are mainly the two types of  interests.

  • Rates of Interest

  • Loans

  • Markups and markdowns are two different types of markups and markdowns.

  • Taxes and Tax Legislation

  • Factor of Discount

  • Annuities

  • Insurance

  • Credit

  • Depreciation

  • Values of the Future and Present

  • Statements of Financial Position

The value of fundamental maths in the business

More knowledge than product manufacturing or service distribution is required to learn a business. When The firm is established, it should take care of its finances as well as make adequate plans for its survival.

Understanding corporate mathematics is essential for maintaining efficient operations and accurate record keeping. Pricing items or services is required from the beginning to the finish, when we must determine whether the aim was met. Let's look at some examples of how maths is used in business.

Problems and Solutions in Business Mathematics

Example 1: A music system cost Rs.10,500 and was sold for Rs.9,500. Calculate the loss or profits.

Solution: As stated,

Cost Price or the CP of a music system is = Rs.10,500

Selling Price or the SP of system is = Rs. 9,500

We can conclude here that C.P. is greater than S.P. Hence, it's a loss in business.

Therefore, we need to tally the loss amount.

Loss = C.P. – S.P.

Loss = 10,500 – 9,500 = Rs.1,000/-.

Example 2: A pair of shoes is purchased for Rs 200 and sold at a 10% profit. Determine the shoe's retail price.

Solution: Given,

Profit = 10% of Rs.200

P = (10/100) × 200 = Rs. 20

S.P. = C.P. + Profit

S.P. = 200 + 20 = Rs.220/-


To wrap up the discussion of Business maths, we have learned about its meaning, topics, importance as well as scope of this subject. Basically, it includes all the mathematical concepts that can be applied to business and management so that it can run successfully. The basic purpose of Mathematics for economics and business is to analyse the business problems and find out the solutions of those problems and control the issues in such a way that it does not occur again in the future and if occurs damages should be minimum. It helps in almost every part of the business such as income & expenditure, sales and purchases, profit & loss, risk management, financial management, payroll management, etc. Besides this, this subject offers various career fields as well.

Mathematical concepts relating to business make up business mathematics. Profit, loss, and interest make up the majority of it. All startups are built on the platform of mathematics sciences. To name a few like Loss and profit, interest rates, tax calculators, and wage calculations are all computed using financial formulae, measurements, and calculations in business mathematics, all of which contribute in performing corporate activities successfully and efficiently.

Business Mathematics is closely linked to statistical principles that provide answers to business challenges. Every business generates a profit and a loss. To discover these aspects, we must study basic maths topics such as profit and loss formulas, percentages, discounts, and so on. Even while this subject does not require pure maths, it does involve mathematical reasoning and some maths formulas. We'll go through what Business Mathematics is, terminology, and key formulas, as well as problems and solutions.

FAQs on Business Mathematics

1.What Are The Topics In Business Mathematics?

Ratio and proportion, profit and loss, interest, determinants, matrices, averages, probability, set theory, reasoning, correlation, regression, measures of Central Tendency, dispersion, time analysis, index numbers, and other topics are covered in this subject.

2.How Can Business Mathematics Help You Make Better Decisions?

It aids in the analysis of the many elements of the business after analysing the current and previous structure as well as the company's performance. Going over the income and expense accounts, for example, can assist in making judgments about business operations so that income can be enhanced and expenses can be minimised. It aids in the decision-making process for marketing and advertising, as well as during any problem that arises after conducting market research. 

3.What's the Difference Between Mathematics and Business Mathematics?

Business mathematics is a commercial subject that is applied to business, whereas mathematics is an important discipline that works with numbers, patterns, and varied shapes. The former is a broader subject because it encompasses everything, including arithmetic, algebra, topology, geometry, and so on, but the later is a subset of mathematics that only deals with principles that are useful for business.Common mathematics is based on arithmetic principles whereas business mathematics is business related and does not involve complex equations. 

4.How Mathematical Models are Used in Business?

Mathematical models aid in the easy representation of real-life business scenarios and challenges. Probability aids in the analysis of any risk or event's possibilities, whereas regression entails the examination of both independent and dependent variables. It aids in the making of judgments such as investment decisions and market and business performance predictions. It aids in the simplification of business procedures. The process of model learning can be difficult for some people and hence they are required to go through the concepts properly.