Important Financial Calculations for ARE 5 0 Exams

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These are the most important financial calculations and terms you need to know for PcM and PjM. Learn these well and you have a good chance of success on the exams. There are a couple dozen terms it would be good to know, but if you start with these seven you'll be in good shape.
This video in blog form:
hyperfinearchi...
01:30 Net Operating Revenue
06:45 Direct Labor
10:10 Indirect Labor
12:44 Utilization Rate
17:44 Overhead Rate
20:58 Break Even Rate
26:50 Net Multiplier
My full PcM & PjM Study Course (including Financial Formulas Workbook)
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More on Utilization Rate
hyperfinearchi...
More on Overhead Rate and Break Even Rate
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Hyperfine Backstory on Bryn Young’s Podcast
hyperfinearchi...
Hyperfine Backstory on Katerina Burianova’s Podcast
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8 сен 2024

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Комментарии : 30

@jeannetteblaquiere5590 7 месяцев назад

Your methods of demonstrating how these calculations work in a real-life scenario is what I appreciate most during your tutorials. It's not just a matter of rote-memorization of these calculations.

@christopherschwalbe2072 2 месяца назад

Thank you for this break down! Super helpful to see it all broken down in common terms and related to eachother

@t113271190 7 дней назад

This was SUPER helpful Ben, thanks so much for making this available to all!

@ivanpatino9714 10 месяцев назад

Thank you for this content, it has really help me study for the PCM exam. PS: There are a couple of errors in the video that might be worth correcting if possible. The red text on the second exercise question reads the same question as the 1st exercise instead of the intended question, and at 26:47 time frame 60.75 is divided by 303. the result is incorrectly indicated to be 79.95 when it should actually be .20049505... that is equal to 20% profit.

@lisabowen5062 9 месяцев назад

I like how you teach the formulas to calculate them quickly with adding how to use them! So helpful!!

@christiananthony1225 Год назад

Great video, right in time for my PCM exam next week

@HyperfineArchitecture Год назад

Thank you. Looking forward to hearing about a pass!

@masterbuilder5752 Год назад

Do well

@kpresnell45 10 месяцев назад

Great video. I have purchased your study guides as well. Can’t go wrong with a variety of different avenues to study from.

@HyperfineArchitecture 10 месяцев назад

Thank you! Looking forward to having you in the course.

@diegosanchezbalderas5269 10 месяцев назад

Great video! I hope your channel grows!

@katielee2040 11 месяцев назад

At 2:59 u said the reimbursable will be subtracted, but in the following question, u just ignore the reimbursable permit fee. Also, in matrix format, reimbursable should be added to the fee billed and then subtract (consultant fee + un-project related expenses). I’m so confused here.

@coracervantes7442 8 месяцев назад

Me too, these example problems are so confused! The extra information makes no sense! 😅

@yrokospeina5828 8 месяцев назад

I don’t know if this explains it but I think what makes the difference is when you are paid for reimbursable. If the client gives you money ahead of time, you don’t count it as income because you will have to use it to pay for permits. However, since client is paying at the end of the project, you’re not seeing the money come in now, so it doesn’t count as part of revenue.

@adrianairby9579 7 месяцев назад

I agree, very confusing question and explanation. But after reviewing my study materials with Amber book, I realized that Permitting is a fee paid directly by the owner, not the architect responsibility. Also, NOR is only related to project expenses, including consultants and reimbursable expenses such as mileage, gas, flights… expenses related to projects, therefore, Marketing is not included.

@jmblkhair7827 5 месяцев назад

It's true that the client should be responsible for permitting fees. Remember that when the client tries to convince you otherwise. . . Oh, and no additional fees for renderings too.

@nicholasjoscelyn6373 3 месяца назад

Okay, so I am assuming from this example that we remove reimbursables from the list of things deducted from the gross revenue?

@helamostafa1245 Год назад

Thanks , it is a very helpful video

@Victorloyt 9 месяцев назад

For the utilization rate quesiton, if the client won't be billed for the project, why is it considered utilization rate? It would make sense if the question mentions that the firm "hasn't" invoiced the client, but it explicitly says that 8 hours won't be billed. Wouldn't this go to a non-billable portion of the project, hence reducing the utilization rate? Sort of similar to how preparing for RFPs or meetings with potential clients aren't considered towards the utilization rate (or are they, and I've misunderstood)?

@libbys8678 8 месяцев назад

Please explain Hyperfine, I don't understand either

@HyperfineArchitecture 8 месяцев назад

Hey Victor, I am not trying to create any trick questions here. I think you understand it all just fine, maybe just being too detailed! According to the AHPP, which is the source for the ARE, time spent working on a project is direct labor and counts toward your utilization rate, whether you decide to bill or not, whether the client pays or not, whether the job is profitable or not. Just remember that if you’re working on a project, it counts. RFP would not count toward utilization rate because you don’t have the project yet. That’s admin or marketing or overhead time, or whatever classification you want to put it in, but it’s not direct labor.

@Victorloyt 8 месяцев назад

@@HyperfineArchitecture thanks for the reply - that makes it pretty clear! I know this is out of the question scope now, but out of curiosity, what kind of situation would work be done towards a project but not be billed?

@nenyattak 7 месяцев назад

@@VictorloytI saw this in one of the Hyperfine videos (can't remember if it's here as well)... but if the contract says that the architect/designer will work 15 hours on a project but the architect/designer works 17 hours (2 hrs more), then you cannot bill for the full 17 hours. Only 15 hours since that's what was originally agreed on in the contract.

@niloofarmousavi3934 7 месяцев назад

Should we subtract the architecture contingency cost if we have it? And is this cost kind of overhead cost?

@Bruno-w4h Месяц назад

Are there any advantages representing percentages in decimal format (.30) during these calculations for the exam, as opposed to simply using the % symbol in the calculator? Is it a cultural matter or simply preference since it gives the same result?

@HyperfineArchitecture Месяц назад

Whatever works best for you is the best option. I like to have the full decimals written out so I can keep track of the variables and then make sure I round my answer at the end based on the instructions in the question.