Rental Management 301: Advanced Rental-Module 3: Financial Management

Module 3: Financial Management - Part 6

Video Transcription

Video Summary

Depreciation is a major expense for rental departments, and it is determined by the size of the fleet rather than the revenue generated. The percentage of depreciation expense can vary based on fleet size and revenue. Interest expense can be calculated based on actual debt or cost of capital. The parts department can benefit from the rental department's existence, as profits generated from the rental department can contribute to the parts department's revenue. The service department can be more cost-effective if routine maintenance is done by an in-house technician rather than outsourcing to the service department. It is important to understand the numbers and make informed decisions about routine maintenance and service costs.

Keywords

depreciation expense

fleet size

revenue

interest expense

routine maintenance