Looking for the difference between Net Service Revenue and Net Operating Revenue

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    Paul Carson (Edited )

    Hi Marisa Ana Bustamante ~

    This is a great question; and as I get a bit closer to wrapping my head around what type questions will be asked, I have produced these (2) equations that are very similar to AHPP and a valued 3rd party resource.  If you will, please review and check my math, because I believe I know the difference between the both; however, I would prefer if someone could review the attached (2) equations (Both are using the same figures, just worded a bit different), this way I can perform the calculations from the words a bit more clear, if this makes any sense to anyone?

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    Haytham Abdelrahman Abdelall

    NOR is used to pay for salaries, operating expenses, admin, office taxes..etc. It’s the revenue after deducting the consultant fees, other reimbursable and non-reimbursable project related (see AHPP # 414).

    NSR basically is a project budget prior to deduct the non-reimbursable expenses & contingency, but reimbursable expenses is not in the picture (this is the way we distribute the fee to calculate initial project labor budget – see AHPP # 625)

    So, since both NOR and NSR are clear from the reimbursable expenses.

    Then, NOR = NSR - reimbursable expenses.

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    Marisa Ana Bustamante

    Thanks for the answers. I have a better idea now.

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    Valerie Galchenko (Edited )

    Net revenue is the money you made from selling services for the month, quarter or year. 

    Operating income is the dollar amount left after you subtract expenses from net revenue: 

    Net operating revenue = Gross revenue - project related expenses

    Revenue factor = net multiplier x utilization rate

    Revenue factor = net operating revenue / total labor dollars

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