Back of the Envelope Calculation - Explained
What is a Back of the Envelope Calculation?
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.
- Marketing, Advertising, Sales & PR
- Accounting, Taxation, and Reporting
- Professionalism & Career Development
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
- Business Management & Operations
- Economics, Finance, & Analytics
Table of ContentsWhat is a Back-Of-The-Envelope Calculation?How is a Back-Of-The-Envelope Calculation Used?Academic Research on Back-Of-The-Envelope Calculation
What is a Back-Of-The-Envelope Calculation?
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.
How is a Back-Of-The-Envelope Calculation Used?
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.