Dropthrough

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Dropthrough
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This is the increase in EBITDA divided by the increase in revenue
Your EBITDA increased by 10M and Revenue increased by 20M. What it the dropthrough
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10/20 = 0.5 = 50%
Services vs Pass-Through
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Services - people related business, pass-through=cash costs rebid to the client at cost
Is EBITDA comming from sevices or pass through?
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Services
What are the two ways to calculate Dropthrough?
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Including Pass-Through or excluding them
Why Pass-Through is not good for EBITDA?
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Typically Pass-Through is low margin so dilutes EBITDA %
Inorganic Growth
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Is the total growth including acquisitions
Organic growth
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Is the underlying growth excluding acquisitions
How is incremental revenue from the acquisition reported?
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During the first 12 months, incremental revenue to the same pre-acquisition period of the acquisition is treated as organic
What do you need to have for recognizing revenue or for invoicing
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Contract with the client. Evidence of arrangement.
DSO acronym
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Days Sales Outstanding
What DSO is?
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Measure of how efficient we are between doing the work for the client and collecting the money.
IQVIA standard for number of days between invoice and collecting money
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30 days
Standard Payment Days for Vendors
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90 days
Cash receit vs cash payement in days
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Receipt = 30 days, Payment = 90 days
For services standard invoicing is at least [blank] on signature
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50%
Can invoice be accepted before services are received?
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No. First service then invoice acceptance
To whom 90 days payment terms apply?
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All suppliers with an annual value more than $10000 USD
Fee Revenue
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revenue for providing a good or service or data
Pass-through Revenue
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cash costs incurred by IQVIA and re-charged to the client
Barter revenue
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revenue generated by transferring equal value services with a client (e.g. exchange of data)
Software/ Licence Revenue
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revenue associated with the provision of software/licences
Booking
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When two parties sign an agreement
How is Revenue reported
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Usually when delivery is made. For larger projects proportional to the work we have done.
When is Revenue reported
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In the period in which they are earned
EAC
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Estimate at completion - if we have done 50% of the work, we can recognize 50% of the contracted revenue

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