MBA Math Skills Every Business Student Needs

MBA Math Skills Every Business Student Needs While some math requirements will vary by program, there are several MBA math skills that every business student needs to succeed. These skills can be obtained (or brushed up on) online, as part of a GMAT prep program or in a math refresher course, such as the pre-MBA math boot camps offered by many business schools. Some of the most important MBA math skills involve basic number sense, algebra, calculus, statistics, and probability. Basic Number Sense Basic number sense may seem elementary, but it is important because it is the foundation for all of the business math you will do in an MBA program. You should be able to understand symbolic representation (i.e. the different ways numbers can be represented), how numbers relate to each other, and how numbers can be used in real-world situations. More specifically, you should be able to: Represent numbers as percents, fractions and decimalsPerform conversions on percents, fractions and decimalsSolve problems using percents, decimals, fractions and mixed numbersSimplify mathematical expressions using the appropriate order of operations Algebra for Business Reviewing all the algebra you learned in high school is a must. Algebra is used constantly in business math, particularly in economics, finance, and statistics courses. You can start your preparation by reviewing the definitions of key terms like variable, constant, exponent and operator. After that, you should practice simplifying algebraic expressions, evaluating algebraic expressions with multiple variables, and expanding algebraic expressions using the distributive property. Finally, take time to learn how to: Solve linear equationsSolve systems of linear equationsSolve quadratics by factoringSimplify and solve binomialsSimplify and solve polynomials Calculus for Business Most business school professors will help you understand the calculus you need to know as you go through the curriculum, but if you spend all your time learning the math while youre in a program, youll get a lot less out of most courses than you should. Its a good idea to master a few essential calculus skills prior to the start of your program. Here are specific concepts to know before you go: Function composition and graphingFunction operationsLimits of functionsSlopes and rates of changeDerivatives and differentiationMinimum and maximum valuesExponentials and logarithmsDefinite and indefinite integrals Statistics for Business Statistical analysis is a common task in many MBA courses.  It is important to understand key measures, such as measures of central tendency and measures of spread or dispersion, as well as key properties of populations and samples. Brushing up on the following statistics concepts will help you ace your coursework: Calculate mean, median, mode and rangeCalculate the standard deviationCalculate normal distributionIdentify shifts in the meanCalculate statistical significanceInterpret sampling distributionEstimate sample and population variance Probability for Business When it comes to MBA math, knowing how to calculate probabilities is helpful but not absolutely essential. However, it is important to know how to use numerical probabilities to interpret scenarios, clarify information in uncertain scenarios, and communicate the probability of certain events occurring. You should know how to define all of the following terms: Dependent eventIndependent eventSimple eventCompound eventComplementary eventMutually exclusive eventNon-mutually exclusive eventConditional probability Math for Finance Every MBA student  takes at least one finance class. If youre specializing in a finance-related track, youll take quite a few finance classes. The curriculum will be much easier to navigate if you are familiar with finance mathematics. Some of the specific topics youll want to study before heading off to business school include the time value of money, rates of return and interest formulas. You should be able to calculate: Present and future valuesRequired rate of returnSimple rate of returnModified rate of returnInternal rate of returnSimple interest and compound interest Math for Accounting Like finance classes, accounting classes are practically  inevitable in an MBA program. Youll spend a lot of time working with financial statements, which means you need to be comfortable with common financial ratios. Understanding these ratios will help you analyze trends and perform ratio analysis. You should learn how to calculate: Liquidity ratiosFinancial leverage ratiosProfitability ratiosAsset turnover ratiosDividend policy ratios