pharm admin test 2, equations
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gross profit margin equation
 [(sales  COGS)/sales] > all income statement
 2025%

tnet profit margin equation
 net income/sales > all income statement
 24%

return on equity
 net income(IS)/avg. owners equity (BS)
 1530%

return on assets equation
 net income (IS)/avg total assets(BS)
 15%

current ratio
 current assets/current liabilities > all balance sheet
 at least 2%

working capital equation
current assets  current liabilities

quick ratio equation
 (current assets  inventory)/current liabilities > all balance sheet
 12%

total debt to equity ratio (TDER) equation
 (total liabilities x 100%)/ owners equity > all balance sheet
 7080%

leverage equation
(total liabilities + owners equity)/ owners equity > all balance sheet

inventory turnover ratio (ITR) equation
COGS (IS)/ avg. inventory (at cost)(BS)

accounts receivable turnover ratio (RTR) equation
credit sales(IS)/avg. accounts receivable(BS)

liquidity equations and what that means
 working capital
 quick ratio
 current ratio
ability to meet current debt obligations without jeopardizing profit potential

solvency equations and what that means
 total debt to equity ratio
 leverage
ability to survive financially (to meet all debt obligations and avoid bankruptcy)

efficiency equations and what that means
 inventory turnover ratio
 accounts receivable turnover ratio
shows the ability of the organization to achieve optimal performance and growth (max output with min input)

profitability equations and what that means
 gross profit margin
 net profit margin
 return on equity
 return on assets
the ability of the organization to generate a profit after all expenses have been paid

CTD equation
[DC + sum(RxS * HW/TH) + (HRC * RxSF/TSF) + (OIC * RxSA/TSA)]/ RxV

COS equation
[DC + sum(SerS * HW/TH) + (HRC * SerSF/TSF) + (OIC * SerSA/TSA)] / SerV

COGD %
100  gross margin %

price of Rx equation
COGS(ingredient costs) + CTD + profit

average net profit comparison equation
price/reimbursement  COGS = gross margin  CTD = net profit/loss

differential analysis equation
DR (avg. gross margin per Rx)  DC (avg. variable cost per Rx)