PcM FINANCIAL RATIOS: Matrix Chart

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9 comments

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    Rodolfo Martin

    Paul, I will read your post later more carefully. I think there is a mistake in the net multiplier formula. It should be net revenue/total direct labor. I also study creating "cheat sheets" that I memoraze and I right down as soon as the exam begins so, if any question shows app, I have my formulas written close to me. If I don't do that,I freak out and I cannot remember the formula. I did that when I took Structural 10 years ago (and I passed, and later lost it in the 5 year cycle). I think now, every exam I have something that I memorize. I know that for PcM, I memorized a table that is in the AHPP that shows the primary and secondary driver of each contraction delivery method. it was very useful because it was useful for PjM and C&E. For PcM, I created my own "cheat sheet" but it as very brief. I will print and see what I can do with your, I think it is a lot to memorize. One thing that I noted is that depending the book you are using, the financial term varies. For example of indirect expenses, some book call it differently. So I tried to stick to the term as they show in the AHPP because that is the basis of NCARB tests. There is a very good groundbreaker piece of text (those in blue boxes at the end of each section) where all this ratios are explained very clearly and with a numerical example. I don't remember the page but it is very common in the AHPP that the ground breakers are much more useful that the hundred of pages. No matter how much I read, all the books explain how to calculate the overhead rate (or ratio, for other books) for an office but never for a particular employee. When I asked that to the bookkeepers in the two firms where I worked, they were not very familiar with the term. They only know about the net multiplier and billing rate. They say that the computer calculates everything. So I am in the sear of how to calculate the overhead ratio for a single employee. If you know how to do it, please, let me know.

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    Rodolfo Martin

    Paul, I like it. I just want to add another comment. For Utilization rate, it can also be thought as: (this is the way I put is in simple words):

    hours worked/ total hours

    The direct hours that can be billed divided the hours in the week (normally 40). For principals the billing hours is lower that the amount of billing hours of an intern, for example. If the principal utilization rate is around 65% (or 0.65) for an intern is around 90% and even 100%.

    I know the concepts but under the test pressure I do not perform very well with the financial questions.

    I think I already have built up an experience and I know what kind of question the test could have and I think I know where I need to reinforce and what things I have never seen that have been included in the tests. I think I master contracts and risk manager (even I know that last time, when I got home, I had given the incorrect choice for a question involving liability. I think I need a little bit more of luck and I will pass it. In  the meanwhile, I have started with PA. Regards

  • Avatar
    Paul Carson

    Thank you for the follow up Rodolfo, as I have already fixed the mistake; so well done on noticing it, you are an "attention-to-detail" scholar, keep it up.  And I truly appreciate the FYI (for your information) about the "groundbreaker" blue boxes, I will put more emphasis on rehearsing them more frequently.

    Yes, INDIRECT EXPENSE can be consider the same as OVERHEAD EXPENSE; similar to CHARGEABLE RATE (RATIO) can be consider the same as "UTILIZATION RATE".  Trust your instinct while taking the exam, your instinct should never be discarded/overlooked.

    Regarding your comment about: "primary and secondary driver of each contraction delivery method", can you please share more detail, as I have not read this far into the AHPP yet to fully understand your words?  As well, if you have cheat sheets that you are willing to share, please do. For what I typically do to avoid plagiarism, I rewrite/redraw others sheets.concepts (I don't like using these words BTW), and make them my own.  Best

     

  • Avatar
    Rodolfo Martin

    Hello Paul,

    The primary and secondary drivers are  in the Handbook, page 512, table 9.2

    You need to memorize it and jot it down once you start the exam and have it handy. It will help you in more than one question.

    Let me look up in my stuff and see what I have to share.

    Keep in touch. By the way, where do you live?

    Rodolfo

  • Avatar
    Rodolfo Martin

    Hello Paul,

    The primary and secondary drivers are  in the Handbook, page 512, table 9.2

    You need to memorize it and jot it down once you start the exam and have it handy. It will help you in more than one question.

    Let me look up in my stuff and see what I have to share. You cheat sheet is already printed and I will memorize it when the times come.

    Keep in touch. By the way, where do you live?

    Rodolfo

  • Avatar
    Paul Carson

    Thx Rodolfo, I reviewed the PDM chart several times, and wasn't sure of just how important if would be, until I received your advice.  I will commit this chart to memory.  I live on the west coast of Florida, 941, and you?

    And yes, please share whatever you have on this topic, as I will be scheduling my PcM exam in 4-weeks.

  • Avatar
    Rodolfo Martin

    Paul,

    I am in Jacksonville, FL. Are you Paul E, in Sarasota?

    Rodolfo

  • Avatar
    Rodolfo Martin

    Paul, I tried to find you in Linkedin in order to add you to your contact but there are many Paul Carsons? Whichi one is you. I am in Jacksonville, FL/ I work  with Fisher Koppenhaffer. Maybe you can find me. Thanks

    Rodolfo

  • Avatar
    Brittney Dillon

    Brilliant, thank you for sharing your tactics.

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