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5 Written questions

5 Matching questions

  1. tests of profitability
  2. tests of efficiency
  3. drug expense per patient day
  4. statement of capital
  5. external benchmarking
  1. a how efficiently are the firm's assets being managed?
  2. b Does business earn adequate profit
  3. c Statement of retained earnings which provides info on how the owner's investment in the business has changed over some period of time
  4. d total annual drug expense/annual patient days
  5. e ratios of other pharmacies of the same type and with similar financial resources, many professional organizations provide financial info and ratios through periodic surveys of their membership (but problems arise when pharmacies differ in Rx volume, location, and accounting)

5 Multiple choice questions

  1. a specialized language used to communicate financial statements
  2. difference between gross margin, and expenses for a specific period of time
  3. Net profit % NCPA digest 2008
  4. indicates how long it takesthe pharmacy to pay its credit purchases need 2 balance sheets- one for beginning inventory, one for end (COGS=BI+P+EI), digest says 22.4 days
  5. how much is left over of assets/liabilities, aka net worth, stockholders equity or capital

5 True/False questions

  1. Quick ratio (current assets-inventory/current liabilities)debts that will come due after the current operating cycle of the business (5 year car loans)


  2. accrual method of accountingamounts owed for goods/services that have been used during the account period bur for which payment has not been made)


  3. tests of overall performanceindicate how effectively funds available to the manager have been used-ROA and ROE


  4. invested capital + retained earningstells you how profits are being usedreports how business's retained earnings have changed over a period of time which include dividnet payments or net losses, which decrease retained earnings, net income and additional owner investment which increase retained earnings


  5. supplies inventoryconsists of goods that were purchased for use in the business rather than for resale (rx labels and vials)