Buisness Management

Comprehensive set of practice questions covering branch performance metrics, revenue calculation, expense management, and corporate ethics based on the lecture transcript.

Why do we analyze on a per unit basis?

By reducing branch numbers to a per unit basis it allows different branches to be compared by the same standard

What does MO stand for in the performance spreadsheet?

Current Month

What does PYMO stand for in the performance spreadsheet?

Previous Year Month

What does YTD stand for in the performance spreadsheet?

Year to Date

What does PYTD stand for in the performance spreadsheet?

Previous Year to Date

What does the number of units represent?

Total number of units in fleet

What is the definition of days earned % (DE%)?

The percentage of revenue-generating days compared to total cars in fleet

What is the FY25 goal for DE%?

$94\%$ or $+2\%$ PYMO DE%

What are a few ways to impact DE%?

Marketing, calling yellow cars, always saying "Yes!" to book-ins

Can your DE% be greater than $100\%$? If yes, why?

Yes, if a vehicle has earned a day of revenue that day and is re-rented, it earns another day of revenue

What is the definition of days earned growth (DE Growth)?

% increase/decrease between current DE% and PYMO DE%

What is the FY25 goal for DE Growth?

$$5\%$$

How do you calculate DE Growth based on the provided notes?

$$(\text{PYMO Units} \times \text{PYMO DE \%}) = \text{DE Growth}$$

What is T&M revenue?

Non-optional revenue (time & miles, daily/weekly/monthly rate, add'l/young driver fee)

How do you calculate T&M Revenue?

$$\text{DE \%} \times \text{ADR} \times \text{\# of Days in Month} = \text{T\&M Revenue}$$

How do you impact T&M Revenue?

Put more cars on rent, sell upgrades

What goes into the Net Other category?

Optional revenue (Protections, GPS, SXM)

How do you impact/improve Net Other?

Sell more protections, roleplay sales script, cultivate positive sales culture

How do you calculate Total Revenue?

$$\text{T\&M Revenue} + \text{Net Other} = \text{Total Revenue}$$

True or False: TIPC is Total Revenue.

TRUE

True or False: C&I is T&M.

TRUE

What is Personnel Expense?

Branch wages, OT, bonuses, and PTO

Whose wages go into the Personnel Expense category?

Branch employees (BRMS, ABRMS, MAS, MTS, Interns, ADs, Branch-Assigned Drivers)

How do we control Personnel Expense?

Going over timesheets daily, making sure that employees are staying at their hours, ensuring clock in and out times are accurate, making sure lunches are taken and for the appropriate amounts of time, scheduling employees correctly

What is Branch Overhead?

Costs associated with the physical branch itself

What is the largest Branch Overhead cost, and how can you control it?

Rent is the largest; control it by growing your fleet and offsetting the per car cost of rent

What is Group Overhead?

Costs associated with the group, often wages

What type of expenses flow into Group Overhead?

Level 3 & 4 wages (ARMS, City Managers, Group Drivers, Group Admin, Group Department Heads)

What is Corporate Overhead?

Wages associated with our corporate office, St. Louis employee wages and help desk wages

What is Breakeven?

The point where you start making profit

How do you calculate Breakeven?

Sum up all costs

What is Operating Profit?

The profit we make off renting our vehicles

How do you calculate Operating Profit?

$$\text{Total Revenue} - \text{Breakeven} = \text{Operating Profit}$$

What is Net Profit?

The total profit the branch makes

How do you calculate Net Profit?

$$\text{Operating Profit} + \text{Inventory Adjustment} = \text{Net Profit}$$

What are managers ranked off?

Operating Profit, TIPC, SQI, Growth

Based on what category are managers paid?

Net Profit

What are Operating Costs?

All costs we can impact that are associated with operating the branch

What is a Referral Expense?

National Marketing: ARMS fees, direct referrals with whom we have a national agreement

What are Comm Referral Expenses?

Corporate rebates for corporate customers

What are Affinity Referral Expenses?

Membership-based organizations that offer travel benefits

What are Tour/Travel Agent (TA/TO) Referral Expenses?

Cost of Emerald Club points earned, frequent flyer mileage redemption fees, and commissions to travel agents

What are Consumer Direct Referral Expenses?

Phone and res fees for CS line

What goes into the Local Referral Expense category?

Referral fees paid to non-national account customers

What is Bad Debt?

An aged Accounts Receivable (AR)

What are the two types of AR's (Accounts Receivable) that go into bad debt?

Force Charges and Direct Bills

What is a Force Charge AR in terms of Bad Debt?

A customer paying for the rental who does not pay their bill, so you "force charge" them by sending them a bill

What is a Direct Bill AR in terms of Bad Debt?

An account/bill-to that has not paid us

When do Force Charges age?

At the end of the month the ticket was closed

When do Direct Bills age?

$90$ days after starting bill date

What is the FY25 goal for Bad Debt?

$$\$3.50/\text{car}$$

Why is the goal for Bad Debt not $0?

We are a conservative company and aware things will not go ideally all the time, so we need to be prepared but focused on reducing it

How can we impact/reduce Bad Debt?

Work ARs to collect on owed money, and make sure to have a callback plan that mitigates the need for force charges

What is Cust Sat?

Customer Satisfaction, the cost of waiving money for customer service related issues

Why do we have Cust Sat expenses and how does it correlate with SQI?

If a customer isn't satisfied, we waive money to solve issues; branches with high Cust Sat cost generally have lower SQI scores

List the four types of Uninsured Losses.

Conversion, Lot Loss, Undocumented Damage, and Employee Loss

What are the goals for Conversion and Lot Loss respectively?

$\$1.25/\text{car}$ for Conversion and $\$1.25/\text{car}$ for Lot Loss

What are the goals for Undocumented Damage and Employee Loss respectively?

$\$5/\text{car}$ for Undocumented Damage and $\$2.50/\text{car}$ for Employee Loss

What is a Conversion?

A rental that is overdue by $2$ days or more and you have $2$ or more broken promises from the customer

What is Lot Loss?

Any damage to an on-lot vehicle not caused by an employee (hail, tree falling, etc.)

What is Undocumented Damage?

Damage that was missed during a vehicle inspection that we can no longer pursue a customer for

What is Employee Loss?

When an employee damages a vehicle or other people's person or property when on the clock

What goes into the Advertising Expense category?

Expenses related to advertising our brand

What goes into the Group Call Center Expense category?

Our marketing team (Jessie Chiotti's team) who smooth out insurance contract discrepancies

What is T&E?

Travel and Entertainment

What type of things go in T&E?

Any money spent towards employee's attitude, performance, and motivation for SQI

What is the branch's philosophy on T&E?

Reward big achievements with T&E, often group efforts, when successes are big

What is the goal for T&E?

$$\$2/\text{car}$$

What goes into the Car Wash Expense category?

Supplies and expenses for the wash bay (water, cleaning products, vacuums, etc.)

Is Car Wash Expense controllable? If so, how?

Yes, by not wasting supplies and using the right supplies for the right task (e.g. not using bug wash as vehicle wash)

What are Direct Costs?

Costs associated with running and maintaining a fleet of vehicles

What is the largest Direct Cost on the per unit?

Depreciation

What is External Maintenance?

Maintenance we pay outside vendors to complete (Firestone, Jiffy Lube, Magic Touch, etc.)

What is Internal Maintenance?

Maintenance performed by in-house vendors (LOFR Van, PDX Center, etc.)

Define Preventative Maintenance and how it is expensed.

Interval maintenance performed off-rent, expensed to the group to ensure vehicles are serviced without a downside

Define Corrective Maintenance and how it is expensed.

Maintenance failed to be performed off-rent that must be fixed while on-rent, expensed to the branch

What is depreciation as defined in the notes?

The cost of the reduction in value to vehicles in our fleet

What rate and frequency do we depreciate our cars?

Monthly basis at $1.7\%/\text{month}$

Why is it important to pull a delete from your fleet ASAP?

Deletes are activated at the best time to sell; sooner pictures get to dealerships/car sales, the sooner you earn money

Why is the Tax and License category $0 on the per unit?

Fees paid when buying vehicles are passed on to the customer

What is the Physical Damage Reserve category, and what type of losses go in this?

Damages the branch must pay for, made up of CDW Losses (Other Losses) and Subro Bad Debt

How are Physical Damage Reserves calculated in the Direct Cost sheet?

On a $12$ month rolling average with a $10\%$ buffer and a $1$ month lag

What makes up the Fuel Collection expense?

Collecting prorated cost of fuel from customers returning vehicles with less fuel than provided

What is the FY25 goal for Net Fuel?

($5)/\text{car}

What is Inventory Adjustment?

The profit we make off selling our vehicles to dealerships or to Enterprise Car Sales

what are the best practices for handling the fuel card and your gas pin at your branch?

We keep the gas card in the safe when we are not using it, the counter manager is the one to give it out and make sure it’s returned, and we do not share gas pins

how can you impact inventory adjustment?

By cleaning and deleting vehicles within 72 hours of a delete being activated

what is the purpose of ethics committee?

To create a safe place to report or discuss ethical concerns without the fear of repercussion

what should you do if you think you see unethical behavior going on at work

Tell your ABRM, BRM, ARM, or ethics committee, whichever you feel comfortable

What is an anonymous way an employee can report ethics issue

Call the ethics hotline or reporting it on the website

how often are good ethical practices discussed

About every week, especially if there’s an incident somewhere else that we have heard about or when we’re talking about creating and driving in ethical sales culture

Who are the members of the Ethics and Compliance Committee?

Todd Stansbury - Group manager/VP

Cash Watson - Group controller

Victor Patricio - HR manager

Mike Salazar - Risk Manager