Financial Equations Flashcards
Accounting Equation
Assets = liabilities + equity
Accounts Receivable Turnover
(A/R turnover)
annual revenue
accounts receivable
Annual Revenue per Veterinarian
annual gross revenue
FTE veterinarians
Average age of A/R
365 days
A/R turnover
Average Age of Inventory
365 days/yr.
Inventory turnover ratio
Average Transaction Value
(ATV)
total revenue
total # transactions
Cash Flow (Current ratio)
Current assets
Current liabilities
Economic Order Quantity
Square root of 2 x A x F
H x UC
* A - Annual demand in units
* F - fixed ordering costs/order
* H - holding costs expressed on annual basis as % of unit cost
* UC - cost to purchase from vendor
Efficiency Ratio
_# of patient visits_ # staff hours
Employee Retention
_# of positions retained _ X 100 # of positions in the organization
Employee Turnover
_# of employees who have left organization _ X 100 # of employees who ar in the organization
Equity Ratio
total liabilities
Total owner’s equity
Gross Profit
Revenue - Cost of Goods Sold = GROSS PROFIT
Inventory Turnover Rate
ITR
annual purchase of supplies
Average inventory value
Net Income (before taxes)
Gross profit - operating expenses = NET INCOME (before taxes)
