Small-business finance
General total cost of ownership
Add acquisition, recurring, one-off and end-of-life costs over a supplied ownership period for an asset or service.
Your inputs
Complete the fields for your selected method. Zero means intentionally zero, not unknown. Currency selection labels amounts; it does not convert exchange rates.
How this calculation works
total ownership cost = purchase + setup + annual costs × years + one-off ownership costs + disposal + financing interest/fees - residual value
A flexible undiscounted worksheet for a stated scope, not every possible cost automatically included. Annual cost must include all relevant operating, maintenance, insurance, subscription and other recurring expense; list irregular costs once. Enter taxes only in appropriate cost inputs if included in your comparison. Do not add depreciation or loan principal/payments on top of acquisition price. The financing field is interest and fees only. Residual value may exceed entered costs, producing a negative modeled net cost; this is not a verified profit forecast. No inflation, discounting, tax credits, asset suitability or investment advice is modeled. Compare alternatives over the same horizon and usage basis.
What information do I need?
Use records for the same job, equipment or accounting period. Only the fields for your selected entry method are required. An unknown amount is not zero.
Input definitions and where to find them
- Asset or service being evaluated: Use your own matching records, supplier quote or explicitly stated estimate. The prefilled figure is illustrative; zero means an explicitly excluded or zero cost, not an unknown value.
- Common ownership period (years): Use your own matching records, supplier quote or explicitly stated estimate. The prefilled figure is illustrative; zero means an explicitly excluded or zero cost, not an unknown value.
- Acquisition price before financing (selected currency): Use your own matching records, supplier quote or explicitly stated estimate. The prefilled figure is illustrative; zero means an explicitly excluded or zero cost, not an unknown value.
- Setup, installation and initial charges (selected currency): Use your own matching records, supplier quote or explicitly stated estimate. The prefilled figure is illustrative; zero means an explicitly excluded or zero cost, not an unknown value.
- Total recurring cost per year (selected currency): Use your own matching records, supplier quote or explicitly stated estimate. The prefilled figure is illustrative; zero means an explicitly excluded or zero cost, not an unknown value.
- One-off future costs during this period: Use your own matching records, supplier quote or explicitly stated estimate. The prefilled figure is illustrative; zero means an explicitly excluded or zero cost, not an unknown value.
- Expense description: Use matching records or an explicitly identified assumption for expense description. Unknown is not the same as zero.
- Total cost (selected currency): Use matching records or an explicitly identified assumption for total cost. Unknown is not the same as zero.
- End-of-period disposal or cancellation costs (selected currency): Use your own matching records, supplier quote or explicitly stated estimate. The prefilled figure is illustrative; zero means an explicitly excluded or zero cost, not an unknown value.
- Expected resale, refund or residual value at end (selected currency): Use your own matching records, supplier quote or explicitly stated estimate. The prefilled figure is illustrative; zero means an explicitly excluded or zero cost, not an unknown value.
- Total financing interest and fees, excluding principal (selected currency): Use your own matching records, supplier quote or explicitly stated estimate. The prefilled figure is illustrative; zero means an explicitly excluded or zero cost, not an unknown value.
- Use units per year (0 if not applicable) (units/year): Use your own matching records, supplier quote or explicitly stated estimate. The prefilled figure is illustrative; zero means an explicitly excluded or zero cost, not an unknown value.
Use the Where to find this value controls beside the inputs for available work-it-out helpers. Estimates remain your assumptions; a helper does not verify the source figures.
Worked example
Example amounts use US dollars (USD).
Example answer: Total ownership cost over entered period is $20,100.00 for the illustrative inputs below.
Example inputs
- Asset or service being evaluated: Example business asset
- Common ownership period: 5.00 years
- Acquisition price before financing: $10,000.00
- Setup, installation and initial charges: $500.00
- Total recurring cost per year: $2,000.00
- One-off future costs during this period
- Expense description: Planned replacement
- Total cost: $500.00
- End-of-period disposal or cancellation costs: $100.00
- Expected resale, refund or residual value at end: $1,000.00
- Total financing interest and fees, excluding principal: $0.00
- Use units per year (0 if not applicable): 1,000.00 units/year
- Total ownership cost over entered period
- $20,100.00
- Average ownership cost per year
- $4,020.00
- Average ownership cost per month
- $335.00
- Ownership cost per use unit
- $4.02
- Gross costs before residual value
- $21,100.00
- Residual value deducted
- $1,000.00
These illustrative values are not recommended rates or industry averages. Replace every example input with your own figures.
Use the result well
Add acquisition, recurring, one-off and end-of-life costs over a supplied ownership period for an asset or service.
Keep inputs on the same scope and time basis. Calculations retain precision internally; displayed values generally round to two decimal places, with extra precision for very small values and whole-unit rounding where required. Economic comparisons describe your supplied assumptions and do not guarantee future results.
This tool provides business arithmetic. It does not approve engineering designs, establish legal or tax treatment, select equipment or certify safe operating conditions.