Calculation Methodology & Formula Transparency
At BusinessCalc, every result is computed live in your browser from your inputs; no calculation data is sent to a server. All underlying formulas adhere strictly to US GAAP, IRS statutory codifications, and FLSA labor standards.
Core Calculator Formulas
| Calculator | Mathematical Formula & Derivation |
|---|---|
| EBITDA | EBITDA = Net Income + Interest + Taxes + Depreciation + Amortization; Margin = EBITDA ÷ Revenue |
| Working Capital / CCC | CCC = DIO + DSO − DPO, where DIO = (Avg Inv ÷ COGS) × 365, DSO = (Avg AR ÷ Revenue) × 365, DPO = (Avg AP ÷ COGS) × 365; NWC = AR + Inv − AP |
| DSCR | DSCR = Net Operating Income ÷ Total Debt Service (Principal + Interest) |
| Depreciation | SL = (Cost − Salvage) ÷ Life; DDB = 2 × SL-rate × Book Value; MACRS = Cost × IRS Pub 946 rate per recovery year |
| NPV / IRR | NPV = Σ CFₜ ÷ (1+r)ᵗ − C₀; IRR = the discount rate r where NPV = 0 |
| EOQ | EOQ = √(2 × Annual Demand × Order Cost ÷ Holding Cost); ROP = (daily demand × lead time) + safety stock |
| DSO | DSO = (Avg Accounts Receivable ÷ Annual Credit Revenue) × 365 |
| Break-Even | Units = Fixed Costs ÷ (Price − Variable Cost per unit) |
| Corporate Tax | Taxable Income × (21% federal + applicable state rate) |
| Employer Payroll Tax | SS 6.2% (to $176,100) + Medicare 1.45% + FUTA (net 0.6% on first $7,000) + SUTA (state) |
| FLSA Overtime | Weighted-average regular rate × 1.5 for hours over 40/week (29 CFR 778.115) |
| Fully-Burdened Labor | Base wage + employer taxes + benefits + PTO + workers' comp |
Assumptions & Rounding Rules
Calculations provided across BusinessCalc are intended as executive planning and financial modeling estimates. To maintain consistency and readability:
- Currency Amounts: Displayed figures are rounded to whole dollars, unless fractional cent inputs are explicitly supplied.
- Ratios & Multiples: Coverage ratios, turnover multiples, and day counts are rounded to 1 decimal place (e.g., DSCR 1.25x, DSO 42.3 days).
- Statutory Rates: Tax brackets, wage caps, and regulatory multipliers reflect the authoritative vintages published on our Data Sources page.
State-Specific Rates & Linkouts
Where a figure depends on state-specific rates (such as state corporate income tax brackets or state unemployment SUTA wage bases), we link directly to the authoritative government directory on Data Sources rather than hard-code a stale table.
Correction & Verification Policy
Found an error in a formula or rate? Email [email protected] or use our Contact Page. We correct verified errors promptly and update the review date.