Formulas Flashcards
Accounting Equation
assets = liabilitlies + equity
A/R Turnover
annual revenue/accounts receivable
Annual Revenue per Veterinarian
annual gross revenue/#FTE vets
Average age of A/R
365/A/R turnover
Average Age of Inventory
365 days / inventory turnover ratio
Average Transaction Value (ATV)
total revenue / total # transaction
Cash Flow (Current ratio)
current assets / current liabilities
Economic Order Quantity (EOQ)
Square root of 2 x A x F / HxUC 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
patient visits / # staff hours
Employee Retention
of positions retained / # positions in organization x 100
Employee Turnover
employees who have left / # employees total x 100
Equity Ratio
total liabilities / total owners equity
Gross Profit
Revenue - COGS = 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)
Net Income (or loss)
net income - taxes = net income (or loss)
Profit Margin
net income (before taxes) / revenue
Profitability Ratio
operating income / revenue
Return on Investment (ROI)
expected annual return / investment x 100
Working Capital
cash on hand + A/R - current liabilities
Revenue per FTE
Avg. transaction fee x # invoices per year
OR
Avg. spend per client per year x # active clients
Cost per CLient
Gross Revenue / # clients x % of cost
% of cost
if profit margin is 40%, cost is 60%
Inventory Variance
(BI + EI) + # ordered - # sold = qty on hand
QOH - count = variance
Re-order Point
average daily use x lead time
Re-order Qty
average daily use x turnover goal (days)
Bulk Purchasing
Avg. daily use x # working days in the extended billing period = amount to order
Inventory Turns
(BI + EI) / 2 = Avg. inventory (AI)
DMSP / AI = ITR (inventory turnover ratio)
ASLD
Average shelf Life in Days
365 / annual ITR (inventory turnover rate)
A/R turnover
credit sales / avg. a/r
Avg. A/R
$ at the beginning of period + $ at the end of period / 2
Break Even Point (Equipment)
price of equipment / client price - cost = # of time necessary to pay off the equipment
Net Profit Margin
net profit / revenue
Gross Profit Margin
gross profit / revenue
Average Transaction
revenue / # transactions
Revenue / FTE
revenue / FTE
A/R Turnover
credit sales / avg. a/r
Days in A/R
days in a period / A/R turnover
% of Gross
expense / gross x 100
Calculating Cost of Service
(FC/min + staff cost/min) x (length of time in staff min + (DVM cost/min) x (length of time in DVM min) + (Direct cost x 2) + profit
