businesss

Question 1

what has allowed the development of corporate style practices

Answer 1

legislation allowing non veterinary ownership of practices

Question 2

what is meant by a corporate practice

Answer 2

practice owned by a company and not an individual

Question 3

what are the 4 types of corporate practices

Answer 3

consolidators, joint ventures, franchises and large independents

Question 4

what is meant by a consolidators corporate and give example

Answer 4

access to informationa nd resources, synergy across practices, good exit strategy, retain original brand and most of staff independent vetcare and CVS `

Question 5

what is a good about a joint venture and give examples of some

Answer 5

centralised asmin, brand identity etc, vets4pets and companion care vets
BUT messy divorce - 2 or more companies join

Question 6

what is a franchise

Answer 6

right to sell companys products in a particular area using the companys name - risk to franchiser and franchisee

Question 7

what is meant by a large indepentant corporate and give examples

Answer 7

technically not corporate, growth through consolidation - vetsnow and goddard veterinary group and best friends veterinary group

Question 8

what are the purpose of buying groups

Answer 8

represent members in negotiations of parmiceuticals and services and have an annual fee - should always make more from discounts than subscription costs e.g. st francis group xl vets and premier vet alliance

Question 9

what are limited companies

Answer 9

locums and corporates - profits taken as devidends

Question 10

what is an asset

Answer 10

resource owned by a business that is the result of previous events and from which future economic benefits are expected to flow

Question 11

what is a current asset

Answer 11

tangible and will create cash within 1 year

Question 12

what is a non-current asset -

Answer 12

takes more than 1 year to create money

Question 13

what is a liability

Answer 13

money owed by the company to other businesses or individuals

Question 14

what is a current and non-current liability

Answer 14

current is due within a year and non current is due in over a year

Question 15

what are merchant goods

Answer 15

remain unchanged (transactional) - supermarkets, selling cloth

Question 16

what are extractive profit drivers

Answer 16

natural resources

Question 17

what are manufacturing proft drivers

Answer 17

raw materials to intermediate or final goods

Question 18

what are service profit drivers

Answer 18

exposits real or intangible assets to create a product or service

Question 19

what is a real and intangible asset

Answer 19

real are things such as planes and buildings and intangible are things like people and knowledge

Question 20

what are variable costs

Answer 20

can be directly attributable to the production of the good or service and fluctuate with demand

Question 21

what is a fixed cost

Answer 21

id nothing is produced then this cost will remain

Question 22

what drives revenue

Answer 22

transaction value x number of transactions

Question 23

what is NOPAT

Answer 23

net operating profit after tax = NOP (1-tax rate)

Question 24

what is EBITDA

Answer 24

earnings before interest and tac also known as EBIT = operating profit - should be 20% of turnover

Question 25

what is ROFCE

Answer 25

return on fixed capital employed NOPAT/(CA +IA)

Question 26

what is ROTA

Answer 26

return on total asseets EBIT/(NCA+IA+CA)

Question 27

what is the calculation for net profit

Answer 27

EBITDA/turnover x 100

Question 28

what is the fixed asset turnover ratio

Answer 28

TO/NCA 100

Question 29

what is labour asset turnover

Answer 29

TO/NCA x 100

Question 30

what is labour productivity

Answer 30

TO/ no FTE

Question 31

what is interest cover and what value must it be

Answer 31

EBIT/interest paid or payable must be greater than 1

Question 32

what is operational gearing

Answer 32

fixed costs/TOC ust be greater than profut fluctuation

Question 33

what is cash exhaustion ratio

Answer 33

ability for a business to continue to operate with cash reserves

Question 34

what is the current asset ratio

Answer 34

shows how well invested a company is - should be less than 1 if fully invested

Question 35

what is operating cash flow to making obligations - what value should it be

Answer 35

shows ability f a company to pay off short term obligations - greater than 15% is successful and less than 5% if failing

Question 36

for a veterinary practice what are the

• assets
• drivers of profit
• most significant costs
• profit measures that should be used

Answer 36

intangible assets
staff mostly vets
fixed
relating to labour costs and general health