# 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 decimals
• Perform conversions on percents, fractions, and decimals
• Solve problems using percents, decimals, fractions, and mixed numbers
• Simplify mathematical expressions using the appropriate order of operations

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 equations
• Solve systems of linear equations
• Simplify and solve binomials
• Simplify and solve polynomials

Most business school professors will help you understand the calculus you need to know as you go through the curriculum. However, if you spend all your time learning the math while you're in a program, you'll get a lot less out of most courses than you should. It's 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 graphing
• Function operations
• Limits of functions
• Slopes and rates of change
• Derivatives and differentiation
• Minimum and maximum values
• Exponentials and logarithms
• Definite and indefinite integrals

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 range
• Calculate the standard deviation
• Calculate normal distribution
• Identify shifts in the mean
• Calculate statistical significance
• Interpret sampling distribution
• Estimate sample and population variance

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 event
• Independent event
• Simple event
• Compound event
• Complementary event
• Mutually exclusive event
• Non-mutually exclusive event
• Conditional probability

## MBA Math

Every MBA student takes at least one finance class. If you're specializing in a finance-related track, you'll 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 you'll 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 values
• Required rate of return
• Simple rate of return
• Modified rate of return
• Internal rate of return
• Simple interest and compound interest

## Math for Accounting

Like finance classes, accounting classes are practically inevitable in an MBA program. You'll 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 ratios
• Financial leverage ratios
• Profitability ratios
• Asset turnover ratios
• Dividend policy ratios