Administration Test 2 Set 1

Front 1

Fiscal Year

Back 1

unit of time used to record financial transactions (is a year but doesn't have to be 1-1 to 12-31)

Front 2

Assets (5)

Back 2

1)what a company owns and uses to produce revenue
2)cash
3)equipment
4)supplies
5)inventory

Front 3

Equities (2)

Back 3

1)sources of assets
2)liabilities + owner's equitiy = equities/assets (this equation can be manipulated)

Front 4

Liabilities

Back 4

debt owed on assets

Front 5

Owner's equity (2)

Back 5

1)owner's own funds
2)net worth

Front 6

Balance Sheet?

Back 6

snapshot of companies assets, liabilites, and shareholder equity @ any point in time

Front 7

Solvency goals

Back 7

business's ability to pay debts over long period of time

Front 8

Current assests
a)def
b)3ex

Back 8

a)can be converted to cash quickly
b1)cash
b2)accounts receivable
b3)inventory

Front 9

Long-term assets
a)def
b)2x

Back 9

a)needed to produce revenue so NOT intended to turn to cash quickly (non-current assets)
b1)fixtures
b2)equipment

Front 10

Ex of other assets? (4)

Back 10

1)prepaid insurance
2)prepaid rent
3)prepaid taxes
4)prepaid wages
PREPAID EXPENSES

Front 11

Current Liabilities
a)def
b)3ex

Back 11

a)claims that are due soon (within next accounting cycle)

b1)accounts payable
b2)notes payable (within 1yr)
b3)accrued expenses

Front 12

Long-term Liabilities
a)def
b)ex

Back 12

a)notes that are payable or debts due (in about a year)
b)notes payable (later than 1yr)

Front 13

Retained earnings? (2)

Back 13

1)stockholder's equity that has come from profits in a corporation
2)these are reinvested and not distributed to stockholders

Front 14

Net Worth
a)def
b)3ex

Back 14

a)what owners owe after all liabilities are satisfied

b1)contributed capital
b2)capital account
b3)retained earnings

Front 15

Income statement def

Back 15

combines all sales and expenses over a period of time and shows profitability

Front 16

Profitability

Back 16

ability to produce sufficient sales to cover expenses, pay current liabilities and produce an acceptable return on investment

Front 17

Revenues

Back 17

total sales

Front 18

COGS (cost of goods sold)

Back 18

cost to the pharmacy of the goods sold to pts

Front 19

Gross margin (2)

Back 19

amount of money availiable to pay for all expenses and taxes as well as provide a profit

total sales - COGS

Front 20

Operating expenses def and 3ex

Back 20

costs to conduct the professional practice

1)manager's salary
2)employee's wages
3)rent, etc

Front 21

Net profit before taxes

Back 21

what remains from revenues after the payment of COGS and operating expenses

Front 22

Net profit after taxes

Back 22

sum remaining after all financial claims have been satisfied

Front 23

Retained earnings

Back 23

portion of shareholder's equity remaining in the business

Front 24

Net income

Back 24

value for net income after taxes appearing on the income statment

Front 25

Statement of Cash Flow (4)

Back 25

1)pharmacies check book
2)helps managers to better monitor the inflows and outflows of cash
3)has inflows/outflows of cash
4)records deposits of cash

Front 26

Outflows of cash 4ex

Back 26

1)checks and eletronic transfers used to pay wholesaler invoices
2)employee wages
3)payments of loans and mortgages
4)purchase of stocks/bonds

Front 27

Importance of cash balance? (2)

Back 27

1)most pharmacies operate on credit
2)most consumer purchases are charges or promises to pay later for goods and services provided

Front 28

Profitability Ratios (2)

Back 28

1)gross margin ratio
2)Net Profit ratio

Front 29

Gross Margin Ratio (4)

Back 29

1)get numbers from income statment (profit/loss statment)
2)= (sales-COGS)/sales
3)indication of efficient purchasing
4)most community pharmacies are 20-25% but want this as high as possible (b/c= more money to pay other expenses)

Front 30

Net Profit Ratio (4)

Back 30

1)get numbers from income statment
2)= (net income after taxes)/(sales)
3)shows relationship between sales and profits after taxes
4)range is 2-4% (want high and most efficient pharmacies are 7%)

Front 31

Current Ratio (7)

Back 31

1)LIQUIDITY ratio
2)evaluates relationship b/w current assets and current liabilities
3)get numbers from balance sheet
4)= (current assets)/(current liabilities)
5)below 2 is not enough current assets
6)over 5 = lotsa cash but not using it to best of abilities
7)optimal value depends on business environment

Front 32

Debt-to-Total Assests Ratio (6)

Back 32

1)is a SOLVENCY ratio
2)get numbers from the balance sheet
3)= (total debt)/(total assets)
4)ability to survive over long term
5)lower value = more assets to creditors if company becomes insolvent
6)40% for established pharmacies

Front 33

Inventory Turnover ratio (4)

Back 33

1)ASSET TURNOVER RATIO
2)get numbers from income statement and balance sheet
3)= (COGS)/(average inventory)
4)minimum of 5-10, but higher=better

Front 34

Hospital pharmacy financial reports are different from community pharmacy reports via... (5)

Back 34

1)in hospital pharmacy is viewed as a cost center
2)budget is responsibility of director of pharmacy
3)drugs costs in Expense Report
4)labor costs in Productivity Assessment Reports
5)Benchmark comparisons via AHA and ASHP

Front 35

5 key purposes of budgeting systems

Back 35

1)planning
2)supporting communication and coordination
3)assigning resources
4)assessing performance and conferring rewards
5)benchmarking

Front 36

Master Budget (2def and 5 parts)

Back 36

1)all inclusive set of interdependent budgets
2)covers all parts of a pharmacies operation for a set period of time

0)sales/revenue budget (making use of a sales forecast)
1)production budgets
2)cash flow budget
3)budgeted financial statements
4)sales expense budget

Front 37

Budgeted Financial Statements include...(3) and purpose (2)

Back 37

1)budgeted income statement
2)budgeted balance sheet
3)budgeted statement of cash flow

1)pro forma analysis
2)illustrate how a pharmacy's financial statments will appear at a specific time if business proceeds according to plan

Front 38

Purpose of Participative Budgeting (3)

Back 38

1)involve all personnel in budgetary process
2)budget is result of consensus building rather than being imposed
3)BUT too much participation and discussion can lead to indecisiveness and delay

Front 39

What is Budgetary Slack? (2)

Back 39

1)padding the budget
2)difference b/w the revenue or cost projection that an individual provides and a realistic estimate of the revenue or cost

Front 40

Reasons for Budgetary Slack (3)

Back 40

1)performance looks better
2)cope w/ uncertainty
3)budgetary cost projections are often cut in the cost-allocation process

Front 41

How to avoid Budgetary Slack? (2)

Back 41

1)avoid relying on the budget as a negative eval tool
2)give incentives to not only achieve projections but to provide accurate projections

Front 42

Ethical issues in budgeting (4)

Back 42

1)padding the budget
2)manipulating reports
3)maximizing one's personal gain for that of others
4)violation of several of the profession's stated ethical standards

Front 43

Purchasing objectives (5)

Back 43

1)obtain right products
2)obtain products in the right quantity
3)obtain products @ right time
4)obtain products @ right price
5)obtain products from the right vendor

Front 44

Right Product?

Back 44

determine how much space is available to stock products and how much money is available to invest in products

Front 45

Inventory management objectives for a pharmacy (6)

Back 45

1)inventory
2)acquistion cost
3)procurement costs
4)carrying costs
5)stock-out-cost
6)inventory management

Front 46

Inventory?

Acquisition cost?

Procurement costs?

Back 46

Inventory-- stock of products held to meet future demands

Acquisition cost-- price pharmacy pays for product

Procurement costs-- costs associated w/ purchasing the product (checking inventory, placing orders, stocking product, etc...)

Front 47

Carrying Costs?

Stock-out-Cost?

Inventory Managment?

Back 47

Carrying costs-- storage, handling, insurance, cost of capital

Stock-out-cost-- cost of not having a product in shelf when pt wants it

Inventory Management-- planning/organizing inventory so that it contributes to profitability

Front 48

Visual Method (of inventory managment)

Back 48

requires pharmacist to look @ number of units in inventory and compare them w/ a listing of how many should be carried

Front 49

Periodic method (of inventory managment)

Back 49

count stock on hand @ predetermined intervals and compare it w/ minimum desired levels

Front 50

Perpetual method (of inventory managment)

Back 50

computerized inventory management systems AND are most efficient method to manage inventory

Front 51

Selection of generic products (and condiseration in inventory management)

Back 51

generics have lower acquistion cost so by stocking em the amount of money invested in inventory is reduced

Front 52

Reduction of inventory size (and condiseration in inventory management)

Back 52

decide to have small front end in sotre to reduce amount invested in inventory

Front 53

Returned-goods policies (and condiseration in inventory management)

Back 53

in exchange for returning unsalable goods, provide credit on future purchases, etc

Front 54

Management of unclaimed Rx's (and condiseration in inventory management)

Back 54

monitor these unclaimed and after a specific period return to shelf

Front 55

Monitoring shrinkage (and condiseration in inventory management)

Back 55

losses due to shoplifting, employee theft, robbery

Front 56

Use of formularies (and condiseration in inventory management)

Back 56

used to facilitate inventory management (so you can carry 1 therapeutic equivalent in a class)

Front 57

Management def

Back 57

brings together resources and unites them collectively to achieve goals or objectives in the most efficient manner possible

Front 58

Leadership def

Back 58

getting a group of people to move towards a particular vision/ideal

Front 59

Management activity (PLANNING)

Back 59

predetermining a course of axn based on one's goals and objectives

Front 60

Managment activity (ORGANIZING)

Back 60

arrangement and relationship of activities and resources that are necessary for the effective accomplishment of a goal

Front 61

Managment Activities (LEADING)

Back 61

bringing about purposeful action toward some desired outcome

Front 62

Management Activities (CONTROLLING)

Back 62

reviewing the progress that has been made toward the objectives that were set out

Front 63

Resources that are managed by a Manager (4)

Back 63

1)money
2)people
3)time
4)information

Front 64

Today's managers need to: (4)

Back 64

1)energize
2)empower
3)support
4)communicate

Front 65

Energize

Back 65

have a vision of what they want to create and the energy to make it happen

Front 66

Empower

Back 66

empower employees to do what needs to be done

Front 67

Support

Back 67

provide their employees with the training, resources, and authority needed to do their jobs

Front 68

Communicate

Back 68

Need to be able to communicate effectively or their organziations will suffer (even if they have the other 3 qualities)

Front 69

Common myths/pitfalls w/ regard to time management (6)

Back 69

1)I dont have time
2)Im too busy
3)My personal time management skills have nothing to do with how I manage time @ work
4)I need time to focus in order to....
5)I'm a perfectionist
6)They didn't teach time management in my cirriculum

Front 70

Need for time managment and organizational skills (4)

Back 70

1)poor time management can lead to frustration, failure to achieve goals
2)cause others to lose faith in you (less promotions)
3)safety can be compromised

1)good time management=higher quality life

Front 71

4 Drucker suggestions for helping executives to better manage their time

Back 71

1)find out exactly how you actually use your time
2)determine what does and does not have to be done (dc the latter)
3)delegate work to others who are equally or better qualified than you are
4)stop wasting other people's time

Front 72

7 step change cycle

Back 72

1)establish your purpose
2)create your vision
3)take stock of current realty
4)choose support
5)draw on organizing wisdom
6)take effective action
7)go deeper to keep going

Front 73

Time Management Matrix

Back 73

Quad1- urgent and important
Quad2- not urgent but important
Quad3- urgent and not important
Quad4- not urgent and not important

Front 74

Quad1 activities (3)

Back 74

1)crisis
2)pressing problems
3)deadline-driven projects

Front 75

Quad2 activities (4)

Back 75

1)prevention and "principle centered" activities
2)relationship building
3)seeing new opportunities
4)Best leaders spend most of time here

Front 76

Quad3 activities (3)

Back 76

1)interruptions
2)some calls/mail/reports
3)some meetings

Front 77

Quad4 activities (3)

Back 77

1)trivia/busy work
2)time wasters
3)pleasant activities

Front 78

Leader (time management style) (2)

Back 78

1)above all value getting the job done and moving forward
2)direct and succint and brief

Front 79

Analytic (time management style) (2)

Back 79

1)value getting tasks done w/ precision and accuracy
2)systematic w/ facts, logic, structure

Front 80

Relater (time management style) (2)

Back 80

1)getting along w/ other is most important
2)dislike making decisions that affect others

Front 81

Entertainer (time management style) (2)

Back 81

1)generate new ideas that keep companies alive
2)no precise predictable schedule

Front 82

When setting goals the goals should be... (5)

Back 82

SMART
Specific
Measuralbe
Achievable
Realistic
Timed

Front 83

Getting your goals organized (4)

Back 83

1)sort through tasks
2)prioritize tasks
3)schedule tasks
4)use a system (calendar, PDA)

Front 84

"Just Do It" (time managment/organizing) (6)

Back 84

1)we do what we like to do first
2)we tackle what we know how to do faster
3)we do activities that we have resources for
4)we do scheduled things before non-scheduled things
5)we respond to others demands before ours
6)we wait until a deadline approaches before getting moving

Front 85

General tips from experts on time management (8)

Back 85

1)take care of yourself
2)morning tasks (some ppl do best work in morning)
3)check email/voice mail 2x/day
4)cluster tasks and activities together (when possible)
5)quantity does NOT equal quality
6)busy does NOT equal productive
7)working harder does NOT equal working smarter
8)rewarding yourself

Front 86

Time management in pharmacy practice (6)

Back 86

1)make full use of techs
2)repond to Q's on the phone thru techs whenever possible
3)if pt insists on speaking to DPh explain that DPh is busy w/ another pt right now
4)find out when is best time to call back the pt
5)gracefully exit conversation after 2 minutes
6)have tech take down all script transfer info

Front 87

Impact of Job stress on DPh (6)

Back 87

1)job dissatisfaction
2)leaving a job and possibly and organization
3)leaving pharmacy as a career
4)lower commitment to pharmacy as a career
5)substance abuse potential
6)burnout

Front 88

4 types of stress and situations

Back 88

1)professional recognition
2)pt care responsibilities
3)job conflicts
4)professional uncertainty

Front 89

Organizational change (management of stress) (3)

Back 89

1)problem identification
2)design and implementation of interventions
3)constant evaluation of the interventions

Front 90

Individual techniques (management of stress) (5)

Back 90

1)problem focused coping techniques
2)seeking social support from family and friends
3)meditation and relaxation
4)biofeedback
5)physical exercise

Front 91

Third Party?

Back 91

organization that reimburses a pharmacy or pt for part or all of the pt's Rx drug costs

Front 92

Patients are either...(3)

Back 92

1)TP
2)private
3)cash paying/uninsured

Front 93

Indemnity Insurance def and was replaced by...

Back 93

pt pays cash and then submits to the insurance program for coverage

Service Benefit Plans

Front 94

Service Benefit Plans

Back 94

pt pays a predetermined amount (copay) and TP pays the remainder

Front 95

PBM provides...

Back 95

Rx claims processing

Front 96

TP Reimbursement Rate formula

Back 96

Ingredient Cost (EAC--estimated acquistion cost) + Dispensing fee

Front 97

Pharmacy Payment Rate formula

Back 97

[AAC--actual acquistion cost + Medication cost marigin] + Dispensing fee

Front 98

Medication cost margin formula

Back 98

EAC-AAC

Front 99

Adequate Payment (pharmacy) formula

Back 99

AAC + Cost of dispensing