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Financial Management Quiz - AHPP

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ARE 5.0 Practice Management - Finance
Marita Rose
Test por Marita Rose, actualizado hace más de 1 año
Marita Rose
Creado por Marita Rose hace más de 6 años
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Resumen del Recurso

Pregunta 1

Pregunta
What is the Profit & Loss Statement (aka Income Statement)?
Respuesta
  • Lists all the income & expenses of a business for a certain period of time
  • Summarizes all assets & liabilities & shows the financial position of a business as of a specific date. The statement of the balance between the asset accounts & the total of liabilities & net worth (owner’s equity) accounts.
  • The dollars remaining after deducting all direct & indirect labor & indirect expenses from revenue, before any distributions are made or tax is paid.
  • Represents the net dollars remaining after deducting the invoiced consultant’s fees & expenses, & all reimbursable & non-reimbursable project-related expenses

Pregunta 2

Pregunta
What is the Balance Sheet?
Respuesta
  • Lists all the income & expenses of a business for a certain period of time (AKA Income Statement)
  • Summarizes all assets & liabilities & shows the financial position of a business as of a specific date. The statement of the balance between the asset accounts & the total of liabilities & net worth (owner’s equity) accounts.
  • The dollars remaining after deducting all direct & indirect labor & indirect expenses from revenue, before any distributions are made or tax is paid.
  • Represents the net dollars remaining after deducting the invoiced consultant’s fees & expenses, & all reimbursable & non-reimbursable project-related expenses

Pregunta 3

Pregunta
Which of the following are financial performance indicators of the Profit & Loss Statement?
Respuesta
  • Utilization Rate
  • Overhead Rate
  • Net Profit
  • Net Revenue per Employee
  • Profit to Earnings Ratio
  • Aged Accounts Receivable
  • Net Multiplier
  • Break-Even Rate
  • Net Operating Revenue

Pregunta 4

Pregunta
Which of the following are the 2 Primary Accounting Reports?
Respuesta
  • The Profit & Loss Statement
  • The Annual Budget
  • General Ledger Accouting
  • The Chart of Accounts
  • The Balance Sheet
  • The Profit Plan

Pregunta 5

Pregunta
What are the 2 essential components of a financial management system?
Respuesta
  • The Balance Sheet
  • The Overhead Rate
  • The Annual Budget
  • The Profit & Loss Statement
  • The Profit Plan

Pregunta 6

Pregunta
What is the Difference between Accounting Reports & Financial Management Reports?
Respuesta
  • The Accounting Reports & their data are the responsibility & realm of a firm's accounting personnel & its outside tax consultant
  • The Financial Management Reports are the responsibility & realm of the firm leaders, even though others might develop & compile these reports (ie Time Sheets)
  • Accounting Reports focus on cash-flow management, accounts payable, & defining the firm's quarterly & annual tax liability, as seen in cash-basis reports
  • Financial Management Reports focus on reviewing & monitoring the key indicators from the financial data provided in the accrual-basis reports (P&L statements)

Pregunta 7

Pregunta
Which of the following are true of the Cash-Basis Report?
Respuesta
  • A type of Profit & Loss Statement / Income Statement that Indicates ONLY the income received & the amounts paid out for expenses to others within a specific accounting period
  • The sole report used to establish a firm's tax liability
  • Establishes the net profit for a firm & the calculation of its 7 relevant key financial performance indicators
  • Defines the available cash for the current month, much of which also includes income from months of previous invoices that were not paid until the current month

Pregunta 8

Pregunta
Which of the following are true of the Accrual-Basis Report?
Respuesta
  • It is a type of Profit & Loss Statement
  • Includes income from months of previous invoices that were not paid until the current month
  • Defines Net Profit
  • Includes earned fees of invoices that have NOT been sent to the client

Pregunta 9

Pregunta
Which of the following are true of the Modified Accrual-Basis Report / Method?
Respuesta
  • Defines the net profit (the profit after working expenses have been paid)
  • Shows income that has been literally received for a previous or current invoice & after expenses have actually been paid
  • Does NOT include earned fees of unsent invoices (It records only the invoiced amounts sent to the clients for the firm)
  • This report does not indicate any actual income received or payments made

Pregunta 10

Pregunta
Which of the following is true of the Net Multiplier?
Respuesta
  • Net Operating Revenue / Cost of Direct labor
  • Measures actual performance and results
  • Defines how much money a firm is earning for every dollar you spend on direct labor
  • Can be used for billing rates

Pregunta 11

Pregunta
What is the recommended range for the Net Multiplier?
Respuesta
  • 2.75 to 3.25
  • 1.25 to 1.4
  • 2.5 to 3.0
  • 1.5 to 2.0

Pregunta 12

Pregunta
Which of the Financial Indicators on the Profit & Loss / Income Statement reflects a firm's well being?
Respuesta
  • Utilization Rate
  • Overhead Rate
  • Break-Even Rate
  • Net Multiplier
  • Aged Accounts Receivable
  • Profit to Earnings Ratio
  • Net Revenue per Employee

Pregunta 13

Pregunta
The comparison of which 2 rates determines if a firm is operating at a loss or a profit?
Respuesta
  • The Net Multiplier & The Break-Even Rate
  • The Overhead Rate & The Net Multiplier
  • The Current Ratio & The Overhead Rate
  • The Billing Rate & The Overhead Rate

Pregunta 14

Pregunta
Which of the Financial Indicators on the Profit & Loss / Income Statement measures the actual performance & results of a firm?
Respuesta
  • Utilization Rate
  • Overhead Rate
  • Break-Even Rate
  • Net Multiplier
  • Aged Accounts Receivable
  • Profit to Earnings Ratio
  • Net Revenue per Employee

Pregunta 15

Pregunta
Which of the Financial Indicators on the profit & Loss / Income Statement determines how much money a firm is earning for every dollar spent on direct labor?
Respuesta
  • Utilization rate
  • Overhead Rate
  • Break-Even Rate
  • Net Multiplier
  • Aged Accounts Receivable
  • Profit to Earnings Ratio
  • Net Revenue per employee

Pregunta 16

Pregunta
Which of the following does NOT apply to the Net Multiplier?
Respuesta
  • Can be used for setting Billing Rates
  • Measures costs
  • Gauges a firm's well being
  • Measures performance

Pregunta 17

Pregunta
Which of the 7 P&L / Income Statement indicators reflects the balance between staff size & the available project work?
Respuesta
  • Utilization Rate
  • Overhead
  • Break-Even Rate
  • Net Multiplier
  • Aged Accounts Receivable
  • Profit to Earnings Ratio
  • Net Revenue per Employee

Pregunta 18

Pregunta
Which of the following equations reflects the Net Multiplier?
Respuesta
  • = ( Net Revenue of the Firm NOR / Cost of Direct Labor )
  • = (Total Indirect Expenses / Total Direct Labor Costs)
  • = (Total Direct labor / Total Labor )
  • = Total Revenue - (Consultant's Fees & Expenses + Reimbursable & Non-Reimbursable Project Related Expenses)

Pregunta 19

Pregunta
What is the recommended range for Total Direct Labor to Net Operating Revenue?
Respuesta
  • 28% or 32% or 1/3rd
  • 45% to 50% 1/2
  • 70% to - 75% 1/4th
  • 15% to 20% 1/8th

Pregunta 20

Pregunta
What is the primary source of a firm's generated revenue & income (Apprx 2/3rd of total annual salaries)?
Respuesta
  • Project-Related Revenue
  • Direct Labor
  • Indirect Labor
  • Reimbursable Project Related Expenses

Pregunta 21

Pregunta
What is the single largest expense for any firm?
Respuesta
  • Annual Salaries
  • Non-Reimbursable Expenses
  • Operating Expenses
  • Risk Management

Pregunta 22

Pregunta
What is a firm's primary resource?
Respuesta
  • Labor
  • Reimbursable Expenses
  • Net Profit
  • Gross Profit

Pregunta 23

Pregunta
If the Net Multiplier is less than the Break-Even Rate, the firm is operating at a
Respuesta
  • Loss
  • Profit

Pregunta 24

Pregunta
In what unit is the Utilization Rate Measured?
Respuesta
  • As a Percentage of Hours
  • Monetary Rate
  • Percentage of Profit
  • Percentage of Salary

Pregunta 25

Pregunta
Which of the following equations reflects the Utilization Rate?
Respuesta
  • = (Net Operating Revenue / Cost of Direct Labor)
  • = (Total Indirect Expenses / Total Direct Labor Costs)
  • = (Total Direct Labor / Total Labor) x 100 (for percentage)
  • = Total Revenue - (Consultant's Fees & Expenses + Reimbursable & Non-Reimbursable Project Related Expenses)

Pregunta 26

Pregunta
What Rate is a measure of a firm's overall efficiency & effectiveness?
Respuesta
  • Utilization Rate
  • Overhead Rate
  • Break - Even Rate
  • Net Multiplier

Pregunta 27

Pregunta
The Utilization Rate is a Direct labor Percentage of what?
Respuesta
  • Total Hours Worked
  • Net Operating Revenue
  • Overhead
  • Net Profit

Pregunta 28

Pregunta
Which Indicator of the P&L / Income Statement is the most important?
Respuesta
  • Utilization Rate
  • Overhead Rate
  • Break - Even Rate
  • Net Multiplier
  • Aged Accounts Receivable
  • Profit to Earnings Ratio
  • Net Revenue per Employee

Pregunta 29

Pregunta
Which of the following equations reflects the Overhead Rate?
Respuesta
  • = ( Net Operating Revenue / Cost of Direct Labor )
  • = ( Total Indirect Expenses / Total Direct Labor Costs )
  • = ( Total Direct Labor / Total Labor ) x 100
  • = Total Revenue - (Consultant's Fees & Expenses + Reimbursable & Non-Reimbursable Project Related Expenses)

Pregunta 30

Pregunta
Which of the following is true regarding the Overhead Rate?
Respuesta
  • Establishes appropriate, profitable billing rates & fees for services to determine a firm's protifability
  • Measures Performance
  • Measures efficiency & effectiveness
  • Gauges a firm's well being

Pregunta 31

Pregunta
What is the recommended range of the Overhead Rate?
Respuesta
  • 2.75 to 3.25
  • 1.25 to 1.4
  • 1.5 to 2.0
  • 2.5 to 3.0

Pregunta 32

Pregunta
Which best describes the following statement, "For every dollar spent in direct labor costs, there is an amount owed in indirect expenses"
Respuesta
  • Net Multiplier
  • Overhead Rate
  • Billing Rate
  • Utilization Rate

Pregunta 33

Pregunta
What comprises a Projection, Expectation, Projected Net Billing & Revenue?
Respuesta
  • Backlog Balance of Fees Remaining
  • Outstanding Project Proposals (Prospect & Suspect) & their projected fee values
  • Future Proposals - Potential New Prospects & Suspects determined by the Marketing Plan
  • The Overhead Rate

Pregunta 34

Pregunta
What are the typical Financial Performance Goals to consider before the start of the new year?
Respuesta
  • Projected Net Billing & Revenue
  • Projected Consultant Fees (as percentage of total billing)
  • Project-Related Expenses
  • Staff Size & Salary Expense
  • Overhead expense & break even rates (as a percentage of direct labor)
  • Net Profit (as a percentage of net operating revenue)
  • Competitive Hourly Billing Rates for every member of the firm
  • Targeted Utilization Rates for every member of the firm
  • Aged Accounts Receivable

Pregunta 35

Pregunta
Which of the following correctly defines "Net Billing?"
Respuesta
  • Fees billed exclusive of expenses & consultants
  • A report that indicates current projects under contract that will carry over into the coming year & the balance of fees remaining to be billed on those projects in the coming year
  • Outstanding project proposals with a better than 50% chance of being awarded
  • Outstanding project proposals with a less than 50% chance of being awarded

Pregunta 36

Pregunta
Which of the following correctly defines "Backlog?"
Respuesta
  • fees billed exclusive of expenses & consultants
  • A report that indicates current projects under contract that will carry over into the coming year & the balance of fees remaining to be billed on those projects in the coming year
  • Outstanding project proposals with a better than 50% chance of being awarded
  • Outstanding project proposals with a less than 50% chance of being awarded

Pregunta 37

Pregunta
Which of the following correctly defines "Prospects?"
Respuesta
  • fees billed exclusive of expenses & consultants
  • A report that indicates current projects under contract that will carry over into the coming year & the balance of fees remaining to be billed on those projects in the coming year
  • Outstanding project proposals with a better than 50% chance of being awarded
  • Outstanding project proposals with a less than 50% chance of being awarded

Pregunta 38

Pregunta
Which of the following correctly defines "Suspects?"
Respuesta
  • fees billed exclusive of expenses & consultants (fees billed to the client other than expenses or consultant fees)
  • A report that indicates current projects under contract that will carry over into the coming year & the balance of fees remaining to be billed on those projects in the coming year
  • Outstanding project proposals with a better than 50% chance of being awarded
  • Outstanding project proposals with a less than 50% chance of being awarded

Pregunta 39

Pregunta
What action should be taken prior to submitting a fee proposal in response to an RFP?
Respuesta
  • Send a comprehensive request for proposal (RFP) to each of the required project consultants
  • Add the consultant's proposed fee to the firm's calculated fee to determine the total fee & the actual percentage of the total fee allocated to the project consultants
  • Determine the backlog balance of fees remaining for current projects under contract
  • Determine Future Proposals, potential new prospects & suspects

Pregunta 40

Pregunta
What are the 2 categories of Project-Related Expenses
Respuesta
  • Reimbursable Expenses
  • Non-Reimbursable Expenses
  • Overhead
  • Indirect Expenses

Pregunta 41

Pregunta
Which of the following defines Reimbursable Expenses?
Respuesta
  • A form of project related expenses that are individually reimbursed
  • A form of project related expenses that are included in the total fee, as in a lump sum fee basis & not individually reimbursed

Pregunta 42

Pregunta
Which of the following defines Non-Reimbursable Expenses?
Respuesta
  • A form of project related expenses that are individually reimbursed
  • A form of project related expenses that are included in the total fee, as in a lump sum fee basis & not individually reimbursed

Pregunta 43

Pregunta
Which are measures to establish a more accurate Net Operating Revenue & Net Profit for a Prospective Project?
Respuesta
  • Identify & Include common project related non-reimbursable expenses in the fee-setting process
  • Identify & Include a unit cost for each expense in the fee-setting process
  • Identify & Include consultant fees
  • Identify & Include project related reimbursable expenses in the fee-setting process

Pregunta 44

Pregunta
Which of the following are causes of project workload being not sufficient enough to allow staff to charge their "normal" number of direct hours (based on their targeted utilization rates) & reducing the percentage of direct hours to NOR to below 28%?
Respuesta
  • There are insufficient hours being charged to project-related assignments due to a reduction in project workload caused by a client stop-work order
  • There are insufficient hours being charged to project-related assignments due to an economic slow-down affecting the entire industry
  • Hours in excess of those budgeted or allowed are being charged to project-related activities
  • A large volume of overtime hours are being charged to project-related activities

Pregunta 45

Pregunta
Which of the following are causes of the percentage of direct hours to NOR being over 32%?
Respuesta
  • Hours in excess of those budgeted or allowed are being charged to project-related activities. Potential negative impact is that the project's total fee is being used too quickly & profit is being consumed to cover these additional hours
  • A large volume of overtime hours are being charged to project-related activities. This would be added to the project fee if the client authorized & was paying for these overtime hours at regular or premium billing rates. If a firm doesn't pay employees overtime, the extra hours will be charged to the project with a zero-cost impact on the project budget or overhead
  • A business decision was made to spend the hours to "catch up" with the project schedule. If no compensation is made for these hours, it is billed at zero-cost. If compensation is being provided, it is a potential fee drain & profit loss
  • There are insufficient hours being charged to project-related assignments due to a reduction in project workload caused by client stop-work order

Pregunta 46

Pregunta
What are 2 components of Total Indirect Expenses?
Respuesta
  • Indirect Labor
  • General & Administrative Expenses (G&A)
  • Non-Reimbursable Expenses
  • Reimbursable Expenses

Pregunta 47

Pregunta
At a 40 hour work week, there are [blank_start]2,080[blank_end] total work hours in a year
Respuesta
  • 2080

Pregunta 48

Pregunta
There are [blank_start]52[blank_end] weeks in a year
Respuesta
  • 52

Pregunta 49

Pregunta
Which of the following defines a firm's Bottom Line?
Respuesta
  • The Net Profit
  • The total dollars earned after all salaries & expenses have been deducted (regardless of literal payment) from the net operating revenue but before any tax is paid or distributions are made
  • The Net Operating Revenue
  • The Gross Profit

Pregunta 50

Pregunta
What are 3 steps to managing a firm's finances?
Respuesta
  • Measuring the variances between the year-to-date actual financial activity & the year-to-date budget
  • Understanding why these variances have occured
  • Taking prompt, corrective action, as necessary

Pregunta 51

Pregunta
Which is the best way to measure & understand variances between the year-to-date actual financial activity & the year-to-date budget?
Respuesta
  • Regularly track, with the Accrual-Basis Profit-Loss Statement, the 7 key financial performance indicators which provide a snapshot of a firm's financial performance at a given point in time
  • Review the Balance Sheet
  • Review the Cash-Basis Profit-Loss Statement
  • Regularly track the annual budget & profit plan

Pregunta 52

Pregunta
Which of the following describes Utilization Rate?
Respuesta
  • Measures the overall efficiency & effective use of labor
  • Not a measure of productivity or profitability
  • Not a measure of "billable" time versus "non-billable" time because not all time charged to projects is billable
  • Measures the hours charged to projects and is expressed as a percentage %
  • Measures the revenue generated for every dollar spent on direct labor
  • Measures the total cost of operations for every dollar spent on direct labor
  • Measures a firm's effectiveness in generating a profit

Pregunta 53

Pregunta
Which of the following best describes the Utilization Rate?
Respuesta
  • = (Direct Labor Hours / Total Labor Hours) x 100
  • = (Total Indirect Expenses) / (Total Direct Labor Costs)
  • = (Overhead Rate + 1.00)
  • = (Net Operating Revenue) / (Total Direct Labor Costs)
  • = (Net Profit before distributions & tax) / (Net Operating Revenue)
  • = (Annual Net Operating Revenue) / (Total Number of Employees)
  • = (Average Annual Accounts Receivable) / (Net Operating Revenue / 365 Days)

Pregunta 54

Pregunta
Which of the following best describes the Overhead Rate?
Respuesta
  • = (Direct Labor Hours / Total Labor Hours) x 100
  • = (Total Indirect Expenses) / (Total Direct Labor Costs)
  • = (Overhead Rate + 1.00)
  • = (Net Operating Revenue) / (Total Direct Labor Costs)
  • = (Net Profit before distributions & tax) / (Net Operating Revenue)
  • = (Annual Net Operating Revenue) / (Total Number of Employees)
  • = (Average Annual Accounts Receivable) / (Net Operating Revenue / 365 Days)

Pregunta 55

Pregunta
Which of the following best describes the Break-Even Rate?
Respuesta
  • = (Direct Labor Hours / Total Labor Hours) x 100
  • = (Total Indirect Expenses) / (Total Direct Labor Costs)
  • = (Overhead Rate + 1.00)
  • = (Net Operating Revenue) / (Total Direct Labor Costs)
  • = (Net Profit before distributions & tax) / (Net Operating Revenue)
  • = (Annual Net Operating Revenue) / (Total Number of Employees)
  • = (Average Annual Accounts Receivable) / (Net Operating Revenue / 365 Days)

Pregunta 56

Pregunta
Which of the following best describes the Net Multiplier?
Respuesta
  • = (Direct Labor Hours / Total Labor Hours) x 100
  • = (Total Indirect Expenses) / (Total Direct Labor Costs)
  • = (Overhead Rate + 1.00)
  • = (Net Operating Revenue) / (Total Direct Labor Costs)
  • = (Net Profit before distributions & tax) / (Net Operating Revenue)
  • = (Annual Net Operating Revenue) / (Total Number of Employees)
  • = (Average Annual Accounts Receivable) / (Net Operating Revenue / 365 Days)

Pregunta 57

Pregunta
Which of the following best describes the Profit to Earnings Ratio?
Respuesta
  • = (Direct Labor Hours / Total Labor Hours) x 100
  • = (Total Indirect Expenses) / (Total Direct Labor Costs)
  • = (Overhead Rate + 1.00)
  • = (Net Operating Revenue) / (Total Direct Labor Costs)
  • = (Net Profit before distributions & tax) / (Net Operating Revenue)
  • = (Annual Net Operating Revenue) / (Total Number of Employees)
  • = (Average Annual Accounts Receivable) / (Net Operating Revenue / 365 Days)

Pregunta 58

Pregunta
Which of the following best describes the Net Revenue per Employee?
Respuesta
  • = (Direct Labor Hours / Total Labor Hours) x 100
  • = (Total Indirect Expenses) / (Total Direct Labor Costs)
  • = (Overhead Rate + 1.00)
  • = (Net Operating Revenue) / (Total Direct Labor Costs)
  • = (Net Profit before distributions & tax) / (Net Operating Revenue)
  • = (Annual Net Operating Revenue) / (Total Number of Employees)
  • = (Average Annual Accounts Receivable) / (Net Operating Revenue / 365 Days)

Pregunta 59

Pregunta
Which of the following best describes the Aged Accounts Receivable?
Respuesta
  • = (Direct Labor Hours / Total Labor Hours) x 100
  • = (Total Indirect Expenses) / (Total Direct Labor Costs)
  • = (Overhead Rate + 1.00)
  • = (Net Operating Revenue) / (Total Direct Labor Costs)
  • = (Net Profit before distributions & tax) / (Net Operating Revenue)
  • = (Annual Net Operating Revenue) / (Total Number of Employees)
  • = (Average Annual Accounts Receivable) / (Net Operating Revenue / 365 Days)

Pregunta 60

Pregunta
In what unit of measurement is the Utilization Rate Expressed?
Respuesta
  • = % of Hours
  • = $$ Cost of Indirect Operations per Every Dollar Spent on Direct Labor
  • = $$ Total Cost of Operations per Every Dollar Spent on Direct Labor
  • = $$ Revenue per Every Dollar Spent on Direct Labor
  • = % of NOR that is Profit
  • = $$ Revenue per Employee
  • = Calendar Days Before Payment is Received

Pregunta 61

Pregunta
In what unit of measurement is the Overhead Rate expressed?
Respuesta
  • = % of Hours
  • = $$ Cost of Indirect Operations per Every Dollar Spent on Direct Labor
  • = $$ Total Cost of Operations per Every Dollar Spent on Direct Labor
  • = $$ Revenue per Every Dollar Spent on Direct Labor
  • = % of NOR that is Profit
  • = $$ Revenue per Employee
  • = Calendar Days Before Payment is Received

Pregunta 62

Pregunta
In What Unit of Measurement is the Break-Even Rate Expressed?
Respuesta
  • = % of Hours
  • = $$ Cost of Indirect Operations per Every Dollar Spent on Direct Labor
  • = $$ Total Cost of Operations per Every Dollar Spent on Direct Labor
  • = $$ Revenue per Every Dollar Spent on Direct Labor
  • = % of NOR that is Profit
  • = $$ Revenue per Employee
  • = Calendar Days before Payment is Received

Pregunta 63

Pregunta
In What Unit of Measurement is the Net Multiplier Expressed?
Respuesta
  • = % of Hours
  • = $$ Cost of Indirect Operations per Every Dollar Spent on Direct Labor
  • = $$ Total Cost of Operations per Every Dollar Spent on Direct Labor
  • = $$ Revenue per Every Dollar Spent on Direct Labor
  • = % of NOR that is Profit
  • = $$ Revenue per Employee
  • = Calendar Days before Payment is Received

Pregunta 64

Pregunta
In What Unit of Measurement is the Profit to Earnings Ratio Expressed?
Respuesta
  • = % of Hours
  • = $$ Cost of Indirect Operations per Every Dollar Spent on Direct Labor
  • = $$ Total Cost of Operations per Every Dollar Spent on Direct Labor
  • = $$ Revenue per Every Dollar Spent on Direct Labor
  • = % of NOR that is Profit
  • = $$ Revenue per Employee
  • = Calendar Days Before Payment is Received

Pregunta 65

Pregunta
In What Unit of Measurement is the Net Revenue Per Employee Expressed?
Respuesta
  • = % of Hours
  • = $$ Cost of Indirect Operations per Every Dollar Spent on Direct Labor
  • = $$ Total Cost of Operations per Every Dollar Spent on Direct Labor
  • = $$ Revenue per Every Dollar Spent on Direct Labor
  • = % of NOR that is Profit
  • = $$ Revenue per Employee
  • = Calendar Days Before Payment is Received

Pregunta 66

Pregunta
In What Unit of Measurement is Aged Accounts Receivable Expressed?
Respuesta
  • = % of Hours
  • = $$ Cost of Indirect Operations per Every Dollar Spent on Direct Labor
  • = $$ Total Cost of Operations per Every Dollar Spent on Direct Labor
  • = $$ Revenue per Every Dollar Spent on Direct Labor
  • = % of NOR that is Profit
  • = $$ Revenue per Employee
  • = Calendar Days Before Payment is Received

Pregunta 67

Pregunta
What is the Recommended Range for the Utilization Rate?
Respuesta
  • 30-35% for an entire firm & 70-80% for professional-technical staff, including principals
  • 40-45% for an entire firm & 85-95% for professional-technical staff, including principals
  • 50-55% for an entire firm & 80-90% for professional-technical staff, including principals
  • 60-65% for an entire firm & 75-85% for professional-technical staff, including principals

Pregunta 68

Pregunta
What is the Recommended Range for the Overhead Rate?
Respuesta
  • 1.30 to 1.50
  • 1.00 to 2.00
  • 2.30 to 2.50
  • 1.25 to 1.65

Pregunta 69

Pregunta
What is the Recommended Range for the Break-Even Rate?
Respuesta
  • 1.30 to 1.50
  • 2.30 to 2.50
  • 2.00 to 2.50
  • 1.50 to 2.00

Pregunta 70

Pregunta
What is the Recommended Range for the Net Multiplier?
Respuesta
  • 3.0+ (Must be Greater than the Break-Even Rate)
  • 3.0+ (Must be Less than the Break-Even Rate)
  • 2.5+ (Must be Greater than the Break-Even Rate)
  • 3.5+ (Must be Greater than the Break-Even Rate)

Pregunta 71

Pregunta
What is the Recommended Range for the Profit to Earnings Ratio?
Respuesta
  • 20% or Greater of NOR (Equal to or Greater than the anticipated Net Profit in the Annual Profit Plan)
  • 15% or Greater of NOR (Equal to or Less than the anticipated Net Profit in the Annual Profit Plan)
  • 40% or Greater of NOR (Equal to or Greater than the anticipated Net Profit in the Annual Profit Plan)
  • 15% or Greater of NOR (Equal to or Greater than the anticipated Net Profit in the Annual Profit Plan)
  • 10% or Greater of NOR (Equal to or Greater than the anticipated Net Profit in the Annual Profit Plan)

Pregunta 72

Pregunta
What is the Recommended Range for The Net Revenue Per Employee Amount?
Respuesta
  • In Excess of $100,000.00 per Employee
  • Equal to $200,000.00 per Employee
  • In Excess of $80,000.00 per Employee
  • Equal to $150,000.00 per Employee

Pregunta 73

Pregunta
What is the Recommended Range for Aged Accounts Receivable?
Respuesta
  • 60 - 90 days (Anything over 90 days means the firm is "lending" money to the client at zero cost)
  • 45 - 90 days (Anything over 90 days means the firm is "lending" money to the client at zero cost)
  • 45 - 60 days (Anything over 60 days means the firm is "lending" money to the client at zero cost)
  • 60 - 80 days (Anything over 80 days means the firm is "lending" money to the client at zero cost)

Pregunta 74

Pregunta
Which of the following describes Overhead Rate?
Respuesta
  • Measures the cost of operations not directly attributed to projects (Total Indirect Expenses)
  • Measures the cost of indirect operations (all indirect expenses) for every dollar spent on direct labor
  • Measures the total cost of operations (all expenses) for every dollar spent on direct labor
  • Measures the cost of indirect operations for every dollar spent on indirect labor

Pregunta 75

Pregunta
Which of the following describes the Break-Even Rate?
Respuesta
  • Measures the total cost of operations (all expenses) for every dollar spent on direct labor
  • Measures the cost of indirect operations (all indirect expenses) for every dollar spent on direct labor
  • Measures the revenue generated for every dollar spent on direct labor
  • Must be less than the Net-Multiplier for Net Profit to be realized

Pregunta 76

Pregunta
Which of the following describes the Net Multiplier?
Respuesta
  • Measures the revenue generated for every dollar spent on direct labor
  • Must be greater than the Break-Even Rate for a Net Profit to be realized
  • Measures Net Revenue per Employee
  • Serves as a basis for billing rates
  • Reflects a firm's well being
  • Measures the actual performance or results of a firm
  • Must be less than the Break-Even Rate for a Net Profit to be realized

Pregunta 77

Pregunta
Which of the following describes the Profit to Earnings Ratio?
Respuesta
  • Measures the firm's effectiveness in generating a net profit
  • A percentage of NOR that is Net Profit
  • Measures a firm's overall efficiency & effective use of labor
  • A percentage of hours

Pregunta 78

Pregunta
Which of the following describes Net Revenue Per Employee?
Respuesta
  • Measures the revenue earnings for each employee
  • Based on a targeted net profit, this indicator contributes to the establishing of the net operating revenue in the coming year's annual budget
  • Measures the net revenue per every dollar spent on direct labor
  • Percentage of NOR that is Profit

Pregunta 79

Pregunta
Which of the following describes Aged Accounts Receivable?
Respuesta
  • Measures the average time interval in calendar days between the date of outstanding invoices & the date payment is received
  • If payment has not been made after 90 days, the firm is "lending" money to the client at zero cost
  • Measures the average time interval in calendar weeks between the date of outstanding invoices & the date payment is received
  • If payment has not been made after 60 days, the firm is "lending" money to the client at zero cost

Pregunta 80

Pregunta
What are the (4) Key Financial Performance Indicators of the Balance Sheet?
Respuesta
  • Solvency (Current Ratio)
  • Liquidity (Quick Ratio)
  • Leverage (Debt-to-Equity)
  • Return on Equity (Net Worth)
  • Aged Accounts Receivable
  • Cash Flow Analysis
  • Summary of Assets & Liabilities

Pregunta 81

Pregunta
Which of the following describes the Current Ratio?
Respuesta
  • Solvency
  • Measures a firm's ability to pay current debt
  • Liquidity
  • Measures a firm's ability to convert assets to cash
  • Measures a firm's ability to manage debt effectively

Pregunta 82

Pregunta
Which of the following describes the Quick Ratio?
Respuesta
  • Liquidity
  • Measures a firm's ability to convert assets to cash
  • Measures a firm's ability to manage debt effectively
  • Measures a firm's ability to pay current debt
  • Solvency

Pregunta 83

Pregunta
Which of the following describes Debt-to-Equity?
Respuesta
  • Leverage
  • Measures a firm's ability to manage debt effectively
  • Solvency
  • Measures a firm's ability to pay current debt
  • Measures a firm's ability to convert assets to cash
  • Liquidity

Pregunta 84

Pregunta
Which of the following describes Return on Equity?
Respuesta
  • Measures the accumulated amount of money returned on a stockholder's investment for their risk & efforts
  • Measures the accumulated amount of money returned on Net Worth Accounts
  • Measures a firm's ability to manage debt effectively
  • Measures a firm's ability to pay current debt

Pregunta 85

Pregunta
Which of the four Financial Performance Indicators of the Balance Sheet measures a firm's ability to pay current debt?
Respuesta
  • Solvency
  • Current Ratio
  • Liquidity
  • Quick Ratio
  • Leverage
  • Debt-to-Equity
  • Return on Equity

Pregunta 86

Pregunta
Which of the four Financial Performance Indicators of the Balance Sheet measures a firm's ability to convert assets to cash?
Respuesta
  • Solvency
  • Current Ratio
  • Liquidity
  • Quick Ratio
  • Leverage
  • Debt-to-Equity
  • Return on Equity

Pregunta 87

Pregunta
Which of the four Financial Performance indicators measures a firm's ability to manage debt effectively?
Respuesta
  • Solvency
  • Current Ratio
  • Liquidity
  • Quick Ratio
  • Leverage
  • Debt-to-Equity
  • Return on Equity

Pregunta 88

Pregunta
What measures a firm's accumulated amount of money returned on a stockholder's investment for their risk & efforts?
Respuesta
  • Solvency
  • Current Ratio
  • Liquidity
  • Quick Ratio
  • Leverage
  • Debt-to-Equity
  • Return on Equity
  • Net Multiplier
  • Overhead

Pregunta 89

Pregunta
Which of the following best describes Solvency?
Respuesta
  • = (Total Current Assets) / (Total Current Liabilities)
  • = (Cash + Accounts Receivable + Revenue Earned, but not billed) / (Total Current Liabilities)
  • = (Total Liabilities) / (Total Equity) x 100
  • = (Total Net Operating Revenue - Total Expenses) / (Total Equity) x 100

Pregunta 90

Pregunta
Which of the following best describes Liquidity?
Respuesta
  • = (Total Current Assets) / (Total Current Liabilities)
  • = (Cash + Accounts Receivable + Revenue Earned, but not billed) / (Total Current Liabilities)
  • = (Total Liabilities) / (Total Equity) x 100
  • = (Total Net Operating Revenue - Total Expenses) / (Total Equity) x 100

Pregunta 91

Pregunta
Which of the following best describes Leverage?
Respuesta
  • = (Total Current Assets) / (Total Current Liabilities)
  • = (Cash + Accounts Receivable + Revenue Earned, but not billed) / (Total Current Liabilities)
  • = (Total Liabilities) / (Total Equity) x 100
  • = (Total Net Operating Revenue - Total Expenses) / (Total Equity) x 100

Pregunta 92

Pregunta
Which of the following best describes Return on Equity?
Respuesta
  • = (Total Current Assets) / (Total Current Liabilities)
  • = (Cash + Accounts Receivable + Revenue Earned, but not billed) / (Total Current Liabilities)
  • = (Total Liabilities) / (Total Equity) x 100
  • = (Total Net Operating Revenue - Total Expenses) / (Total Equity) x 100

Pregunta 93

Pregunta
You need to measure a firm's ability to pay current debt, what equation do you use?
Respuesta
  • = (Total Current Assets) / (Total Current Liabilities)
  • = (Cash + Accounts Receivable + Revenue Earned, but not billed) / (Total Current Liabilities)
  • = (Total Liabilities) / (Total Equity) x 100
  • = (Total Net Operating Revenue - Total Expenses) / (Total Equity) x 100

Pregunta 94

Pregunta
You need to measure a firm's ability to convert assets to cash, what equation do you use?
Respuesta
  • = (Total Current Assets) / (Total Current Liabilities)
  • = (Cash + Accounts Receivable + Revenue Earned but not billed) / (Total Current Liabilities)
  • = (Total Liabilities) / (Total Equity) x 100
  • = (Total Net Operating Revenue - Total Expenses) / (Total Equity) x 100

Pregunta 95

Pregunta
You need to measure a firm's ability to manage debt effectively, what equation do you use?
Respuesta
  • = (Total Current Assets) / (Total Current Liabilities)
  • = (Cash + Accounts Receivable + Revenue Earned but not billed) / (Total Current Liabilities)
  • = (Total Liabilities) / (Total Equity) x 100
  • = (Total Net Operating Revenue - Total Expenses) / (Total Equity) x 100

Pregunta 96

Pregunta
You need to measure the accumulated amount of money returned on a stockholder's investment (aka owners equity or net worth) for their risk and efforts, what equation do you use?
Respuesta
  • = (Total Current Assets) / (Total Current Liabilities)
  • = (Cash + Accounts Receivable + Revenue Earned, but not billed) / (Total Current Liabilities)
  • = (Total Liabilities) / (Total Equity) x 100
  • = (Total Net Operating Revenue - Total Expenses) / (Total Equity) x 100

Pregunta 97

Pregunta
In what unit is the Current Ratio expressed?
Respuesta
  • $
  • %

Pregunta 98

Pregunta
In what unit is Solvency expressed?
Respuesta
  • $
  • %

Pregunta 99

Pregunta
In what unit is the Quick Ratio expressed?
Respuesta
  • $
  • %

Pregunta 100

Pregunta
In what unit is Liquidity expressed?
Respuesta
  • $
  • %

Pregunta 101

Pregunta
In what unit is Debt-to-Equity expressed
Respuesta
  • $
  • %

Pregunta 102

Pregunta
In what unit is Leverage expressed?
Respuesta
  • $
  • %

Pregunta 103

Pregunta
In what unit is Return on Equity expressed?
Respuesta
  • $
  • % of investment

Pregunta 104

Pregunta
What is the target rate for the Current Ratio?
Respuesta
  • 1.5 to 1.0
  • 1.0 to 1.0
  • 1.0 to 2.0
  • 1.0 to 1.5

Pregunta 105

Pregunta
What is the target rate for Solvency?
Respuesta
  • 1.5 to 1.0
  • 1.0 to 1.0
  • 1.0 to 2.0
  • 1.0 to 1.5

Pregunta 106

Pregunta
What is the target rate for the Quick Ratio?
Respuesta
  • 1.5 to 1.0
  • 1.0 to 1.0
  • 1.0 to 2.0
  • 1.0 to 1.5

Pregunta 107

Pregunta
What is the target rate for Liquidity?
Respuesta
  • 1.5 to 1.0
  • 1.0 to 1.0
  • 1.0 to 2.0
  • 1.0 to 1.5

Pregunta 108

Pregunta
What is the target rate for Debt-to-Equity?
Respuesta
  • Less than 35%
  • Greater than 35%
  • Less than 50%
  • Greater than 50%

Pregunta 109

Pregunta
What is the target rate for Leverage?
Respuesta
  • Less than 35%
  • Greater than 35%
  • Less than 50%
  • Greater than 50%

Pregunta 110

Pregunta
What is the target rate for Return on Equity?
Respuesta
  • Equal to or greater than the anticipated net profit in the annual profit plan (20% or greater)
  • Equal to or less than the anticipated net profit in the annual profit plan (20% or greater)
  • Equal to or less than the anticipated net profit in the annual profit plan (35% or greater)
  • Equal to or greater than the anticipated net profit in the annual profit plan (35% or greater)
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