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BMcD Financials > PM Financials 101 > Flashcards

PM Financials 101 Flashcards

1
Q

Soft Backlog

A

Estimated Revenue for won opportunities but not yet funded.

OR

Sold not Booked

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2
Q

Actual Sales/ Funding

A

Amount that has been funded for a project through completion

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3
Q

Hard Backlog

A

Funded amount from projects- ITD Revenue

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4
Q

ITD Revenue

A

Revenue recognized on the project to date

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5
Q

Total Backlog

A

Hard + Soft Backlog

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6
Q

Revenue

A

Amount we bill and collect on a project before deductions for project expenses

OR

Cash/Consideration a company ultimately receives for selling goods or services

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7
Q

What covers Non Labor

A

AZCO
BMI
Subcontractors
Per Diem/Travel
Equipment/Small Tools
Computer usage

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8
Q

What covers Labor Burden

A

Employee Raw Cost (Labor Cost)
Labor Burden such as
Discretionary (ESOP & Bonus)
Payroll Taxes
401k matches
Insurance
Paid Leave (1.3$ or 1.0$ of raw labor for 2023)
Contingent Worker (CWK)

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9
Q

What is internal reserves

A

Amount set aside in anticipation of additional costs and/or identified risks

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10
Q

Cost % Complete (GAAP Compliant)

A

ITD Project Costs
____________________
EAC (Forecasted total) Project Costs

Refer to album for pic

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11
Q

Revenue formula

A

Cost % Complete x Funding

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12
Q

Gross Profit

A

Revenue - Non Labor Cost - Labor Cost - Labor Burden - CWK - Internal Reserves

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13
Q

Gross Profit Short Formula

A

Revenue - Project Costs

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14
Q

Gross Profit % formula

A

Gross Profit
——————
Revenue

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15
Q

Net income formula (theory)

A

Gross Profit - Overheads - Equity Charge

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16
Q

What covers Project Costs

A

Raw Labor
Labor Burden
Non Labor
Computer usage
CWK
BMI

17
Q

Break Even Multiplier formula

A

Direct Labor Cost + Total Marketing + Total Admin + Discretionary + Equity Charge
———————————————————
Direct Labor Cost

18
Q

Net Income calc

A

(ELM - BEM) x BMcD Raw Labor Cost

19
Q

Pre-Discretionary Income Per Person (PDIP) - Theory

A
  1. Performance metric measuring profitability on a per employee owner basis
  2. Serves as means for determining year end pool
  3. Reported at EAC level only
20
Q

PDIP formula

A

EAC Gross Profit - Overheads = Net Income + Discretionary = EAC Pre. Disc. Income / EO AFTE

= EAC PDIP

The above Net income is different from the project based or GP net income and this is a standardized net income across the board for all projects. This is done so that new offices who may have a high BEM will not be hit.

21
Q

EO AFTE acronym

A

Employe Owner Annualized Full Time Equivalent

22
Q

EO AFTE calc

A

Total EAC Forecasted EO Hours
———————————————
2088 hours

23
Q

How many work hours in a year?

A

2088 hours

24
Q

What does the grey bar represent in PDIP tab in Project Gateway

A

It’s the EAC Global Practice Average across all your top tasks

25
Q

Does CWK come under Non Labor or labor Burden?

A

Labor Burden

26
Q

What are the types of Reserves

A
  1. Internal Contingency
  2. Warranty Reserve
  3. Conditional Contingency
27
Q

What is Internal Contingency

A

Not client facing
Based on project/contract specific risks
Includes contractual disincentives like liquidated damages

28
Q

What is Warranty Reserve

A

Typically EPC projects
Consider time period, Type of risks, Flow down clauses, Client historical data and expectations

29
Q

What is Conditional Contingency

A

Based on terms and conditions of prime agreement or contract with the client. Typically used in Shared savings, T&M not to exceed.

30
Q

Physical Progress % Complete is also called as?

A

Earned Value

31
Q

Cost % complete vs Physical Progress % Complete

A

Physical Progress based on project progress

Cost % complete impacted by contingency or warranty reserves and timing of invoices received from third parties

32
Q

What is Equity Charge?

A

Equity Charge or credit is a monthly interest charge (6% annually)

It is a component of Green Book Financials

Not recorded as specific project cost in ECOSYS

33
Q

Equity Charge Calc

A

Outstanding AR (Accounts Receivable) + Retainage Receivable + Unbilled - Overbilled - Unpaid AP Invoices - Retainage Payable

The above total x 0.06/12

34
Q

ELM formula

A

Revenue - Non Labor Costs - CWK
____________________________________
Raw labor Costs

BMcD Financials (3 decks)

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