PRM Exam 2 Questions AND Correct Answers
$1000 order with 30% trade discount, 5% quantity, and 1%
cash; how much will you pay? - ✔✔$658.35
$500 order with 40% trade discount, 10% quantity, and 2%
cash; how much will you pay? - ✔✔$264.60
ABPD problem p. 370 - ✔✔...
ABPD: stands for, what it means, calculate - ✔✔Annual break-
even point in dollars
Sales volume at which pharmacy will break even for the year
= FE/MIR
*see opposite p.369 in notes for explanation of formula
concept*
ABPD/PBPD problem and proof and scenarios a-c at bottom p.
371 - ✔✔...
Accounting equation - ✔✔Assets = liabilities + owner's equity
(assets - liabilities = owner's equity)
,Accounting quiz 1 p. 358 - ✔✔Answers p. 359
Accounting quiz 2 p. 360 - ✔✔Answers p. 361-364
Acid test ratio: how to calculate, what it measures, value -
✔✔Quick assets (cash + accounts receivable) / current
liabilities
Liquidity
Minimum 1:1, usually >1
AI= - ✔✔(BI+EI)/2
Areas to control to maintain cash flow - ✔✔1) Inventory
control
2) Accounts receivable
3) Fixed and variable expenses
4) Debt service or loan interest expenses
AVG RTd A/P: what it measures, what it means - ✔✔Average
return time in days to pay accounts payable
,Want to pay as late as possible, but still on time to take
advantage of discounts for as long as possible and avoid late
fees; discounts loss affects income statement (essentially
increases COGS)
AVG RTd A/R: what it measures - ✔✔Average return time in
days on accounts receivable
Balance sheet time period - ✔✔Historical record of firm from
first day of busines through end of business day listed
Basic approaches to inventory control - ✔✔*Dollar control:
make budget based on $ based on history
*Unit control: set budget given to you then determine how
many units to carry within budget
*Usually use combo (determine $ then w/in that, how to allot
those dollars)
Basic stock vs safety stock and how order cycle time affects it -
✔✔Basic stock: inventory carried to meet average demand
level
Safety stock: inventory carried to account for fluctuations in
demand and order cycle times
, Big fluctuations in order cycle time often causes pharmacies to
stock more inventory than desired
Best measure of profitability (financial ratios) - ✔✔Return on
investment
BI=120,000
EI=100,000
P=480,000
Inventory turnover rate? - ✔✔4.55 (I think-no answer in
notes)
BI=EI=100,000
P=450,000
Inventory turnover rate? - ✔✔4.5
Calculate the following ratios based on balance sheet/income
statement p. 343-344
*NP%
*ROI
$1000 order with 30% trade discount, 5% quantity, and 1%
cash; how much will you pay? - ✔✔$658.35
$500 order with 40% trade discount, 10% quantity, and 2%
cash; how much will you pay? - ✔✔$264.60
ABPD problem p. 370 - ✔✔...
ABPD: stands for, what it means, calculate - ✔✔Annual break-
even point in dollars
Sales volume at which pharmacy will break even for the year
= FE/MIR
*see opposite p.369 in notes for explanation of formula
concept*
ABPD/PBPD problem and proof and scenarios a-c at bottom p.
371 - ✔✔...
Accounting equation - ✔✔Assets = liabilities + owner's equity
(assets - liabilities = owner's equity)
,Accounting quiz 1 p. 358 - ✔✔Answers p. 359
Accounting quiz 2 p. 360 - ✔✔Answers p. 361-364
Acid test ratio: how to calculate, what it measures, value -
✔✔Quick assets (cash + accounts receivable) / current
liabilities
Liquidity
Minimum 1:1, usually >1
AI= - ✔✔(BI+EI)/2
Areas to control to maintain cash flow - ✔✔1) Inventory
control
2) Accounts receivable
3) Fixed and variable expenses
4) Debt service or loan interest expenses
AVG RTd A/P: what it measures, what it means - ✔✔Average
return time in days to pay accounts payable
,Want to pay as late as possible, but still on time to take
advantage of discounts for as long as possible and avoid late
fees; discounts loss affects income statement (essentially
increases COGS)
AVG RTd A/R: what it measures - ✔✔Average return time in
days on accounts receivable
Balance sheet time period - ✔✔Historical record of firm from
first day of busines through end of business day listed
Basic approaches to inventory control - ✔✔*Dollar control:
make budget based on $ based on history
*Unit control: set budget given to you then determine how
many units to carry within budget
*Usually use combo (determine $ then w/in that, how to allot
those dollars)
Basic stock vs safety stock and how order cycle time affects it -
✔✔Basic stock: inventory carried to meet average demand
level
Safety stock: inventory carried to account for fluctuations in
demand and order cycle times
, Big fluctuations in order cycle time often causes pharmacies to
stock more inventory than desired
Best measure of profitability (financial ratios) - ✔✔Return on
investment
BI=120,000
EI=100,000
P=480,000
Inventory turnover rate? - ✔✔4.55 (I think-no answer in
notes)
BI=EI=100,000
P=450,000
Inventory turnover rate? - ✔✔4.5
Calculate the following ratios based on balance sheet/income
statement p. 343-344
*NP%
*ROI
