What is the mathematical formula that businesses use to estimate their return when starting a business?

Question

I keep seeing how new companies are develop and that there is an estimate on their annual return, net profit etc.

Can you provide a link or an example how they calculate using the mathematical formula that they use?

Answer 1

There is no mathematical formula to estimate the return on a new business. Most new ventures create a business plan, which forecasts revenues, expenses, and cash flow, and from these forecasts an expected return on investment can be calculated.

Answer 2

This link should assist you further:

http://www.entrepreneur.com/businessplan/calculators/startcost/ -- Starting Costs Estimator

Hope that helps!