Financial Calculation Standards
The following are the financial calculation standards we will use for this textbook.
The following are the financial calculation standards we will use for this textbook.
Formatting Dollars:
- Use a dollar sign ($) before the number.
- Separate thousands with commas.
- For decimals, use a period (.) and two decimal places.
- Example: $1,234.56
Formatting Percentages:
- Use a percent sign (%) after the number.
- No commas are used.
- Example: 15%
Video: Percentage and Decimals in the Food Service Industry: In this short 5-minute mini-lesson, Chef Colin Roche explains why percentages and decimals are important in the food service industry and then shows a super easy visual way to calculate them!
Rounding to the Tenth:
- If the hundredth digit (the second digit after the decimal) is five or greater, round the tenth digit (the first digit after the decimal) up.
- If the hundredth digit is less than 5, round the tenth digit down.
- Example: 3.145 rounds to 3.15 and 2.762 rounds to 2.76.
Converting Percentages to Decimals:
- Divide the percentage by 100 (or you can move the decimal two places to the left).
- Example: 15% = 15 / 100 = 0.15
Dividing a number by a percentage increases the amount. This might seem counterintuitive, but it’s because you’re finding out how many times the percentage fits into the whole number.
- For example, if you have 20 apples and want to know how many groups of 50% (or half) you can make, you’d divide 20 by 0.5. The answer is 40 groups, so the number increases from 20 to 40.
- Remember, a percentage is a fraction of 100, so dividing by a number less than 1 (0.5 or 0.25) will result in a more significant number.
Multiplying a number by a percentage less than 100%. Understanding this concept is crucial in real-life situations, such as calculating discounts or taxes. A percentage is a fraction of 100. For example, 50% is equal to 0.5. Multiplying a number by 0.5 is the same as dividing it by 2.
- Multiplying by a percentage less than 100% decreases the original number.
- When the percentage is less than 100%:
- Multiply 100 by 50%
- Convert 50% to a decimal: 50% = 0.5
- Multiply: 100 * 0.5 = 50
- When the percentage is less than 100%:
Multiplying a number by a percentage more than 100% (e.g., 120%).
- Multiplying a number by a percentage greater than 100% increases the original number because you multiply the number by a value greater than 1.
- When the percentage is greater than 100%:
- Multiply 100 by 150%
- When the percentage is greater than 100%:
-
-
- Convert 150% to a decimal: 150% = 1.5
- Multiply: 100 * 1.5 = 150
-
Additional Tips:
- Always be consistent with your formatting throughout your calculations and financial documents.
- Specify if you are rounding up or down if the situation requires extra clarity.
- Some financial software may have pre-set formatting options you can utilize.
