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Flashcards in Financial Equations Deck (22):
1

Accounting Equation

Assets = liabilities + equity

2

Accounts Receivable Turnover

(A/R turnover)

annual revenue
accounts receivable

3

Annual Revenue per Veterinarian

annual gross revenue
 FTE veterinarians

4

Average age of A/R

365 days
A/R turnover

5

Average Age of Inventory

365 days/yr.
Inventory turnover ratio

6

Average Transaction Value

(ATV)

total revenue
total # transactions

7

Cash Flow (Current ratio)

Current assets
Current liabilities

8

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

9

Efficiency Ratio

# of patient visits
# staff hours

10

Employee Retention

# of positions retained                         X  100
# of positions in the organization

11

Employee Turnover

# of employees who have left organization       X 100
# of employees who ar in the organization

12

Equity Ratio

total liabilities
Total owner's equity

13

Gross Profit

Revenue - Cost of Goods Sold = GROSS PROFIT

14

Inventory Turnover Rate

ITR

annual purchase of supplies
 Average inventory value

15

Net Income (before taxes)

Gross profit - operating expenses = NET INCOME (before taxes)

16

Net Income (or loss)

Net income - taxes = NET INCOME (or LOSS)

17

Operating Income

 

net income & vet salaries & loan interest & rent

18

Profit Margin

net income (before taxes)
revenue

19

Profitability Ratio

operating income
revenue

20

Return on Investment

expected annual return        X 100
Investment

21

Working Capital

Cash on Hand + A/R - current liabilities

22