Quiz: How Much Do You Know About Fortna Software?

Cash Basis

Accrual Basis

Back of the Envelope

Clay Tablet

The client is billed immediately for retention milestone The client is billed immediately for retention milestone

Revenue is picked up equal to the down payment

The Sale is considered "booked"

Shared Savings are determined and reimbursed to the client.

Fixed Price contract

Support contract

Installation contract

Time and Expense contract

Direct Cost and Indirect Cost divided by 2080 hours

Direct Cost divided by expected billable hours

Direct Cost and Indirect Cost divided by expected billable hours

Direct Cost, Indirect Cost and SG&A divided by expected billable hours.

To have a net zero cost for a department at the end of the year.

To properly bill the client for services rendered.

To properly charge to projects all subcontract costs.

To ensure that all categories of employees are charged using the same cost rate.

The employee receives 1/2 credit on utilization for hours charged.

The client is charged for these hours and the employee does not receive utilization credit.

The client is not charged but the project is charged for the cost.

The client is not charged for these hours; project not charged for the cost.

Should always be considered when negotiating a new contract.

Should always be cumulatively negative.

Should be considered when calculating monthly actual revenue

Should equal zero by the end of the project.

Revenue and gross profit growth equal to 30% annually

Operating profit equal to 35% of gross profit

Delivery department expenses to equal 25% of revenues.

Gross profit to be 25% of revenues

To present a point-in-time report of the company's financial condition

To identify company performance on a cash basis

Provide a summary of a company's financial transactions.

Reflect a particular project's performance.

Used to quickly determine if a project's cash flow is positive.

Is a statistic used to determine a company's ability to meet short-term obligations

Is based on information found in the Income Statement.

Is a statistic used to determine a company's ability to meet long-term obligations

A detailed estimate of total direct costs is developed by the Estimating Dept.

Billing and Revenue occur at the same time.

The Estimating Department does not routinely obtain supplier quotes for high cost components.

Revenue is recognized equally each month over the life of the project.

Fortna maintains less than 50% of annual net income in the firm.

Consulting projects are normally cash neutral.

The Burn Rate of cash is used in developing a cash flow projection.

Billings need to be prompt and collections need to be monitored.

Billed

Retained

Recognized

Collected

Travel Expenses are billed at Fortna's actual cost.

Travel Expenses are billed at Fortna's standard rate.

A contract never includes a cap.

Revenue is "recognized" at cost.

Charged to the client, not charged to the project, employee receives utilization credit

Not charged to the client, charged to the project, employee receives no utilization credit

Charged to the client, charged to the project, employee receives no utilization credit

Charged to the client, charged to the project, employee receives utilization credit

True

False

True

False

Our industry leads the economic indicators.

Our industry lags the economic indicators.

Our industry determines the economic indicators.

Our industry does not need to consider economic indicators.

True

False

Understand the differences between budgets and actual performance.

Determine the resources charged to a project.

Track each project by cost category.

Calculate standard rates.