Final Flashcards
(120 cards)
1
Q
tax deduction
A
reduces your taxable income.
2
Q
tax credit
A
comes off of your actual taxes
3
Q
which is better, tax deductible vs tax credit
A
doesn’t matter
4
Q
why have financial record
A
1.track performance/ efficiency 2make .managerial decisions 3.satisfy investors 4. satisfy supervisor 5. taxes 6. basis for credit 7. evaluate a project or propsal 8. make decisions on MCO contracts 9. joint venture 10. investments
5
Q
break even
A
your revenues (sales) are equal to your costs (expenses)
6
Q
fixed costs
A
remain the same no matter how many
1. rent
2.
7
Q
variable costs
A
change with every unit you dispense or administer
8
Q
break even formula
A
SxQ=VQF
s=sales(retail or reimbursement)
q= number of units sold
v=variable expenses that go into the cost of those items
9
Q
asset
A
anything of value owned
10
Q
fixed assets
A
long term assets: property, plant, equipment
11
Q
current assets
A
short term assetstypically used up in < 1 year,
cash, accounts receivable, inventories
12
Q
quick assets
A
very near cash
cash
accounts recievable
13
Q
liabilities
A
something that a person or company owes
14
Q
current liabilities
A
short term
usually due <1 year
ex: accounts payable
15
Q
long term liabilities
A
due >1 year
notes payable
16
Q
accounting period
A
time chosen for the purpose of measuring net income
17
Q
what is on the income statement
what is it
A
revenues
expenses
profit/loss statement
18
Q
what is on the balance sheet
what is it
A
statement of financial position
assets
liabilities
equity
19
Q
revenue
A
sales
20
Q
expenses
A
costs of the resources used in providing goods and services
21
Q
fixed expenses
A
expenses that do not change
ie rent, utilities, taxes, salaries (unless on commission)
22
Q
variable expenses
A
expenses that usually change during accounting period
23
Q
equity
A
net worth
what you own minus what you owe
24
Q
cogs
A
actual cost of items sold during the account period
25
gross margin
sales-cogs
what you sold it for minus what it cost you
26
net profit
net income before taxes
| gross margin-expenses
27
net income
net profit minus income taxes
28
net worth
al your assets minus all your liabilities
29
working capital
assets actively used in cashflow
30
net working capital
current assets vs current liabilities
31
accounting
the process of identifying, measuring, recording, and comminucating the economic events of an organizatoin
32
types of accountng
1. cost accounting
| 2. accrual accounting
33
cost accounting
phase of accounting that deals with collecting and controlling the costs of producing a given product
34
accrual accounting
general accounting
35
double entry account
1. system that requires two book entries
2. one debit and one credit
3. assets, expense
4. liability, income/revenue, equity/capital
36
accounts that usually increase with a credit
```
GIRLS
gains
income
revenues
liabilities
stockholders
```
37
accounts that usually increase with a debit
```
DEALS
dividends
expenses
assets
losses
```
38
assetts equation
assetts= liabilities +owners
39
liquidity- what is it
what can u use
what cant you use
how well a company can use its current assets (quick) to meet its current obligations
i.e cash, marketable securities, A/R, mutual funds
NOT Inventory
40
solvency
how well cana company use its current assets and inventory to meet its obligations
41
financial position
ability of the pharmacy o meet all of its obligations by using all of its assets
42
profitability
tool to measure success in a pharmacy
43
efficiency
how well a company is being managed
44
liquidity equation
AKA quick ratio
quick assets/current liabilities
45
solvency
AKA current ratio
| current assets/ current liabilities
46
financial position
how much do you owe compared to what you are worth
Debt/equity ratio
47
dupont analysis
used to evaluate the component parts of a companies return on investment
48
businesses with very low profit margins have to have high what
asset turnover.
ex: walmart
49
does the largest effect on net profit comes from the income statement to the balance sheet
THE INCOME STATEMENT
50
WHAT IS THE BEST MEASURE OF PERFORMANCE
return on investment
51
does assets turn over have high or little effects on ROI
little. but it is important in improving cash flow
52
AMP
average manufacturer price
prince whole salers pay drug makers
53
ASP
average sales price
54
procurement costs
the cost of purchasing inventory for use or sale
55
carrying costs
the costs associated with carrying that inventory
56
shrink
difference between your physical inventory and your paper inventory
57
normal: if ..
sales: $300
COGS: $200
what would be your GP/GM
$100
gp: 100/300=33% of sales
COGS: 200/300= 67% of sales
58
shrink:
sales: based on inventory, you thought you sold $300, but you actually sold $240 (could be due to a multitude of reasons)
COGS: $200
what would your GP/GM be
$40
gp: 40/240=17% of sales
COGS: 200/240=83% of sales
59
reasons for shrink
shorted by the wholesaler
2. tech did not check correctly
3. they were inadvertently thrown out
4. they were damaged and put in the returns tote
5. your techs stole (internal theft
6. customers stole (external theft
7. combo of 5 and 6, either sepereatly or in corroboration
60
what happens if you have too many OOS
patients leave
61
discount
pharmacies buy at a discount
brands: 15-25% discount
generics >25% discount
62
how do you know what to purchase
```
depends on what you sell
look at past sales record
surveys of customers
look at target market
formularies
```
63
central/ cooperative buying
group of pharmacists get together to form a buying group to get volume discounts
64
orders recieved
all orders must be check in and verified with the invoice
65
Inventory control and purchasing
what are the 3 major items to negotiate
discounts
dating and credit terms
transportation charges
66
Inventory control and purchasing
types of dicounts
trade discounts
quantity discounts
cash discounts
serial discounts
line discounts
list less of cost plus discounts
67
Inventory control and purchasing
what are trade disocunts
usually largest discount.
amount by which a manufacturer or wholesalers reduced the retail price of a product when it sells to a reseller
68
Inventory control and purchasing
quantity discounts
incentives fo purchasing larger .
don't base purchase on extra discount. should be based on product movement
69
Inventory control and purchasing
cash discounts
price reduction for prompt payment of invoice.
always take the cash discount
70
Inventory control and purchasing
serial discounts
serial discounts= trade, quantity, and cash discounts.
discount offered after a number of different conditions, rather than just offering one discount after one condition is met
71
Inventory control and purchasing
line extension discount
instead of earned discount over a month, this discount is given based on the dollar volume per invoice line
72
Inventory control and purchasing
list/less discount-cost plus discount
discounts based on volume, payments, services rendered etc
73
Inventory control and
what is the difference btw the closing date and the due date
closing date: end of billing cycle
due date: the last day you have to make atleast the min. payment before you incur the late fee.
74
Inventory control and purchasing
which card do you use to purchase something in terms of closing date and due date
the one when the closing date is past.
75
Inventory control and purchasing
who owns the inventory
the manufacturer owns the inventory. you just make a profit for selling it
76
Inventory control and purchasing
who pays for transportation
whoever holds the title to the merchandise at the time of the shipping pays fr the transportation costs
77
Inventory control and purchasing
what is consignment
manufacturer (consigner) owns the merchandise, not you. you are selling it for them and you make a profit
78
what happens in supply and demand to the wuantity we sell if we raise the price of a product,
the quantity we sell will drop
79
what happens in supply and demand to the price if the product we have a short supply
the price goes up
80
what happens in supply in demand to the price if the demand increases
the price goes up
81
types of demand
```
elastic
inelastic
directed
derived
competitive (coke vs pepsi)
complementary (cars and gas)
```
82
indicators of inventory management efficiency
Inventory turn over
inventory as a percentage of sales
inventory as a percent of working capital
net profit as a percentage of inventory
83
why should we do inventory management
keeps total costs to minimum
improves customer service
few OOS. customers will leave if u cause inconvenience even though you are cheaper
improves cash flow, NOT profit
84
4 things to improving cash flow
cash flow staements
keep A/R current
budgets
inventory control
85
2 systems for inventory
periodic
perpetual
86
INVENTORY MANAGEMENT
periodic system
an occasinoal physical count to measure the level of inventory and the cost of goods sold
use when have a large volume of low cost items
87
INVENTORY MANAGEMENT
perpetual system
perpetual system keeps track of inventory balances continuously, with updates made utimaticaly wehn a product is recieved or sold
very tedious
usually reserved for very expensive or very secure items i.e controlled substances
88
INVENTORY MANAGEMENT
| FIFO
assumes the items bought first are the first regardless of how you handle the actual physical inventory
89
INVENTORY MANAGEMENT
| LIFO
assumes that the last items are the first sold. you actually rotate your merchandise
90
INVENTORY MANAGEMENT
| net ptofit understated
means that we are making more profit than we are actually reporting
91
INVENTORY MANAGEMENT
gross margin return on investment
measures how productively youre turning inventory into gross profit
92
INVENTORY MANAGEMENT
| fiebs deep discount theory
decrease inventory turnover leads to increased gross margin, which leads to decreased customer base
achiecing an increased inventory turnover with decreased GM occurs slowly overtime
93
INVENTORY MANAGEMENT
classifying inventroy controls
ABC classification (Paretos Principle)
A. very tight control, complete and accurate records, frequent review
B. less tightly controlled, good record, regular review
C. simplest controlls possible, minimal records, large inventories, periodic review and order
94
INVENTORY MANAGEMENT
| what are A items
fast moving high cost items. i.e epogen
95
INVENTORY MANAGEMENT
| what are C items
generics. dont even bother looking at them
96
INVENTORY MANAGEMENT
problems with inventory control
not having a plan for inventory control
failure ot moitor regulalrly (q3mo)
tendency to carry to many brands
accumulation of excess inventory via quantitiy or seasonal deals
97
```
DEPRECIATION
fixed assetts (non current assett)
```
assetts that are purchased by the pharmacy which last > year. ex comouters, cars, buildings, mixing machines. lose value evntually
98
DEPRECIATION
what is it
process of expensing a non current assett to a business.
99
DEPRECIATION
| why we have it ?
listed on the expense part of the income statement
govt realizes. theres a cost to doing business
2. fixed assetts wear out or become obselete
3. helps to start a business
4. helps stimulate the economy
100
DEPRECIATION
w.o it, do ppl pay more taxes?
yes
101
DEPRECIATION
valuating fixed assetts
need to include actual costs used to acquire the fixed asset. THE ACTUAL COST
102
DEPRECIATION
straight line method
asume the consumption of the asset willoccur evenly every year over the depreiciation.
equation. aanual dep=initial cost-salvage value/estimated life span
103
DEPRECIATION
double declining method
accelerate the amount of time that you need to depreciate something.
want tot ake the discount faster off
104
DEPRECIATION
| sum of eyar digits
accelerated method for determining an assets expected
(assets cost-residual value )x fraction that decreases each year
105
DEPRECIATION
which one to use
if use in graph
1. straight line, depreciation is constant over the year to its salvage vlaue. (CREATES A STRAIGHT LINE)
double decline. decline of the line is faster and salvage is value is lower
SOYD id somewhere in between. end u at same point .
106
DEPRECIATION
overall message
the faster you decline, the more tax deduction your gonna get
107
DEPRECIATION
where does accumulated depreciation go
on the balance sheet
108
DEPRECIATION
amortization
lending:
payment off debt in regular installments over a period of time
dudcution of capital expenses over a specific period oftime of intangible assetts
109
DEPRECIATION
good will
typically reflects intangible assetts such as strong brand, good customer relations etc. on th ebalance sheet because it is not a physical asset
110
DEPRECIATION
EBDITA
Earnings before interest
interest before amortization. what's the company really worth
111
MARKETING pHARMACY PRODUCTS AND SERVICES
latent demand
strong demand but no product or service to fulfill it
112
MARKETING pHARMACY PRODUCTS AND SERVICES
irregular demand
fluctuations on demand depending on venue, geographic areaa
113
MARKETING pHARMACY PRODUCTS AND SERVICES
| full demand
supply and demand are balanced
114
MARKETING pHARMACY PRODUCTS AND SERVICES over full deamnd
demand>> supplies
115
MARKETING pHARMACY PRODUCTS AND SERVICES
SWOT analysis
strengths
weaknesses
opportunities
Threats
116
HR
what is minimum wage in western NY?
13.25
117
HR
what are minors (ppl under 18) not allowed to do
no contruction
| no heavy machinery
118
HR
minors must have a what to work
certificate (working papers) AT-19 green papers
119
HR
| minors 16 -17 working hours
no more than 28 hrs per week
no mor ehtan 4 hours on a day preceding a school day
max 6 days per week
not prior to 6 am, before 10 pm
need written permission if they wanna work btw pm and midnight the day before school
120
age 44-15
3 hours on any school day
no more than 18 hours a week
8 hours on a non school day
