ARE-5.0 PcM FINANCIAL RATIOS: Matrix Chart - pec
BREAK-EVEN ratio: total cost of operations / total spent on direct labor.
CHARGEABLE ratio: time spent on direct labor / total time spent.
NET MULTIPLIER ratio: net revenue/ total direct labor.
OVERHEAD ratio: total office overhead / total direct labor.
QUICK (liquid) ratio: cash + revenue not billed / total liability.
UTILIZATION ratio: total direct labor / total labor.
NOTICE STEPS “A, B, & C” (circled in GREEN): Review A, B, & C Matrix Excel Charts to get a general idea of the design process. NEXT, to simplify the Ratio words, review the “INDEX” lettering system.
Take the (6) main FINANCIAL RATIOS; put them in alphabetical order by memorizing this acronym (for lack of better words).
B.IG C.ONSTELLATIONS N.EAR O.UR Q.UIET U.NIVERSE
Now, MEMORIZE IT!!!
Memorize “B” as BER, record it memory! Understand that BER stands for BREAK-EVEN RATE.
MEMORIZE IT!!! Refer to the INDEX for letter assignments & MEMORIZE IT!!!
On a blank piece of paper, draw several Matrix Excel Charts with: (3) columns from left to right, and (6) rows from top to bottom…3×6 = 18 = (18) rectangles; keep in mind you only need to memorize (14) steps as you manipulate your way to the chart.
STEPS 1: Starting in the upper left corner, as you move down the column, write:
- “B” - eR
- “C” - R
- “N” - M
- “O” - R
- “Q” - R
- “U” - R
Starting at COLUMN#1, ROW#2, the next letter to write will be “R” for RATE; w/ exception to ROW#3 which will be “M” for MULTIPLIER (SEE MATRIX CHART).
STEP 2 & beyond: Move your way through the Matrix by following the RED numbers in sequential order. Once you have played Tetris with the (14) numbers/steps, your mind will now have a solid memorization of how to flow through the matrix from 1 to 14: STEPS 1 has already been done.
As you draw more Matrix Excel Charts (I suggest drawing the RED number charts 4 or 5 times, and MEMORIZE IT!!!), you should be able to grasp the concept of alphabetizing BOTH, the acronym, and the RED sequential numbering system. ENJOY, and share abundantly!!!
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