Formulas

Question 1

Accounting Equation

Answer 1

assets = liabilitlies + equity

Question 2

A/R Turnover

Answer 2

annual revenue/accounts receivable

Question 3

Annual Revenue per Veterinarian

Answer 3

annual gross revenue/#FTE vets

Question 4

Average age of A/R

Answer 4

365/A/R turnover

Question 5

Average Age of Inventory

Answer 5

365 days / inventory turnover ratio

Question 6

Average Transaction Value (ATV)

Answer 6

total revenue / total # transaction

Question 7

Cash Flow (Current ratio)

Answer 7

current assets / current liabilities

Question 8

Economic Order Quantity (EOQ)

Answer 8

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

Question 9

Efficiency Ratio

Answer 9

patient visits / # staff hours

Question 10

Employee Retention

Answer 10

of positions retained / # positions in organization x 100

Question 11

Employee Turnover

Answer 11

employees who have left / # employees total x 100

Question 12

Equity Ratio

Answer 12

total liabilities / total owners equity

Question 13

Gross Profit

Answer 13

Revenue - COGS = Gross Profit

Question 14

Inventory Turnover Rate (ITR)

Answer 14

Annual Purchase of supplies / average inventory value

Question 15

Net Income (before taxes)

Answer 15

gross profit - operating expenses = net income (before taxes)

Question 16

Net Income (or loss)

Answer 16

net income - taxes = net income (or loss)

Question 17

Profit Margin

Answer 17

net income (before taxes) / revenue

Question 18

Profitability Ratio

Answer 18

operating income / revenue

Question 19

Return on Investment (ROI)

Answer 19

expected annual return / investment x 100

Question 20

Working Capital

Answer 20

cash on hand + A/R - current liabilities

Question 21

Revenue per FTE

Answer 21

Avg. transaction fee x # invoices per year
OR
Avg. spend per client per year x # active clients

Question 22

Cost per CLient

Answer 22

Gross Revenue / # clients x % of cost

Question 23

% of cost

Answer 23

if profit margin is 40%, cost is 60%

Question 24

Inventory Variance

Answer 24

(BI + EI) + # ordered - # sold = qty on hand

QOH - count = variance

Question 25

Re-order Point

Answer 25

average daily use x lead time

Question 26

Re-order Qty

Answer 26

average daily use x turnover goal (days)

Question 27

Bulk Purchasing

Answer 27

Avg. daily use x # working days in the extended billing period = amount to order

Question 28

Inventory Turns

Answer 28

(BI + EI) / 2 = Avg. inventory (AI)

DMSP / AI = ITR (inventory turnover ratio)

Question 29

ASLD

Average shelf Life in Days

Answer 29

365 / annual ITR (inventory turnover rate)

Question 30

A/R turnover

Answer 30

credit sales / avg. a/r

Question 31

Avg. A/R

Answer 31

$ at the beginning of period + $ at the end of period / 2

Question 32

Break Even Point (Equipment)

Answer 32

price of equipment / client price - cost = # of time necessary to pay off the equipment

Question 33

Net Profit Margin

Answer 33

net profit / revenue

Question 34

Gross Profit Margin

Answer 34

gross profit / revenue

Question 35

Average Transaction

Answer 35

revenue / # transactions

Question 36

Revenue / FTE

Answer 36

revenue / FTE

Question 37

A/R Turnover

Answer 37

credit sales / avg. a/r

Question 38

Days in A/R

Answer 38

days in a period / A/R turnover

Question 39

% of Gross

Answer 39

expense / gross x 100

Question 40

Calculating Cost of Service

Answer 40

(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