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Questions and Answers
What is the formula to calculate Profit?
What is the formula to calculate Profit?
- Revenue / Expenses
- Revenue - Expenses (correct)
- Revenue + Expenses
- Expenses - Revenue
What does the term 'Production' refer to in a dental practice?
What does the term 'Production' refer to in a dental practice?
- Total expenses incurred by the practice
- Total dollar amount of dental treatment performed (correct)
- Total salaries paid to employees
- Payments made to the practice
What is the main purpose of a 'Working Capital' loan?
What is the main purpose of a 'Working Capital' loan?
- To finance day-to-day operations (correct)
- To purchase long-term assets or investments
- To pay salaries to employees
- To reduce business expenses
What does the term 'Break even point' describe in dentistry?
What does the term 'Break even point' describe in dentistry?
What does EBITDA stand for?
What does EBITDA stand for?
What is the highest expense in most businesses, especially skilled services?
What is the highest expense in most businesses, especially skilled services?
Study Notes
Financial Concepts in Dentistry
- Profit is calculated by subtracting Expenses from Revenue.
- Production refers to the total dollar amount of dental treatment performed by a provider or practice in a given time frame.
- Collections refer to payments made to the practice and deposited in the business bank account, including cash, credit cards, financing, and insurance.
- Collections Ratio is the calculated percentage of Collections divided by Adjusted Production for a given month or year.
- Break-even point is the total cash requirements to pay the bills and keep the practice open, where collections equal total operating expenses.
- Salaries are typically the highest expense in most businesses, especially skilled services like dentistry.
- Working Capital is the available cash needed for day-to-day operations, not used to purchase long-term assets or investments.
- Doing Business as (DBA) associates a business entity trade name with a legal structure/organization name.
- EBITDA (Earnings before Interests, Taxes, Depreciation, and Amortization) is related to business valuation.
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Description
Understand key financial concepts in dentistry, including profit, production, collections, and break-even points. Learn how to manage your dental practice's finances effectively.