Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Courses
  • Home
  • Economics, Finance, & Analytics
  • Research, Quantitative Analysis, & Decision Science

Back of the Envelope Calculation - Definition

Written by Jason Gordon

Updated at December 18th, 2020

Contact Us

If you still have questions or prefer to get help directly from an agent, please submit a request.
We’ll get back to you as soon as possible.

Please fill out the contact form below and we will reply as soon as possible.

  • Accounting, Taxation, and Reporting
    Managerial & Financial Accounting & Reporting Business Taxation
  • Law, Transactions, & Risk Management
    Government, Legal System, Administrative Law, & Constitutional Law Legal Disputes - Civil & Criminal Law Agency Law HR, Employment, Labor, & Discrimination Business Entities, Corporate Governance & Ownership Business Transactions, Antitrust, & Securities Law Real Estate, Personal, & Intellectual Property Commercial Law: Contract, Payments, Security Interests, & Bankruptcy Consumer Protection Insurance & Risk Management Immigration Law Environmental Protection Law Inheritance, Estates, and Trusts
  • Marketing, Advertising, Sales & PR
    Principles of Marketing Sales Advertising Public Relations SEO, Social Media, Direct Marketing
  • Business Management & Operations
    Operations, Project, & Supply Chain Management Strategy, Entrepreneurship, & Innovation Business Ethics & Social Responsibility Global Business, International Law & Relations Business Communications & Negotiation Management, Leadership, & Organizational Behavior
  • Economics, Finance, & Analytics
    Economic Analysis & Monetary Policy Research, Quantitative Analysis, & Decision Science Investments, Trading, and Financial Markets Banking, Lending, and Credit Industry Business Finance, Personal Finance, and Valuation Principles
  • Professionalism & Career Development
  • Courses
+ More
Back to: RESEARCH, ANALYSIS, & DECISION SCIENCE

Back-Of-The-Envelope Calculation Definition

A back-of-the-envelope calculation is a form of mathematical calculation carried out quickly just to give a rough estimate of a particular calculation. It is an informal calculation done on an envelope or a piece of paper. This type of rough mathematical calculation is not often accurate, it is just an estimated rounded number computed hastily to create a ballpark figure. A back-of-the-envelope calculation is often used by salespersons, accountants and even professionals that want to use ballpark figures to give estimate of a present or future result. Although, the result of this calculation is expected to be more accurate than a guess and at the same time not as accurate as a formal mathematical calculation.

A Little More on What is a Back-Of-The-Envelope Calculation

A back-of-the-envelope calculation is often used in science, technology, engineering and mathematical fields. Accountants and financial professionals use this rough and quick calculation to examine whether there is a need to carry out a more detailed calculation. Professionals, mathematicians and individuals that want to perform a quick mathematical estimation of a figure use the back-of-the-envelope calculation. For instance, at the World Government Summit in 2017, Elon Musk gave some back-of-the-envelope calculations on how aliens from outer space could possibly reach the earth. Through the use of a back-of-the-envelope calculation, Elon Musk was able to present his predictions of how aliens invade the skies and can also reach the earth.

Reference for Back-Of-The-Envelope Calculation

  • https://en.wikipedia.org/wiki/Back-of-the-envelope_calculation
  • https://www.investopedia.com Investing Financial Analysis
  • https://www.wired.com/story/how-to-get-better-at-back-of-the-envelope-calculations/
  • book.bionumbers.org/how-to-make-back-of-the-envelope-calculations/
  • https://en.wiktionary.org/wiki/back-of-the-envelope

Was this article helpful?

Yes
No

Related Articles

  • Tree Diagram - Definition
  • Discrete Distribution - Definition
  • Venn Diagram - Definition
  • Coefficient of Determination - Definition

©2011-2021. The Business Professor, LLC.
  • Privacy

  • Questions

Definition by Author

0
0
Expand