Business Acumen for Compensation Professionals v1.0

Page:    1 / 6   
Exam contains 78 questions
Expand All

An organization whose focus is on obtaining capital, marketing products or services, sales growth and cash conservation is most likely to be in what stage of the business lifecycle?

  • A. Start-up
  • B. Growth
  • C. Mature
  • D. Decline


Answer : A

What choices are most commonly faced by companies in the decline phase of the business lifecycle?

  • A. Whether to improve productivity, obtain new operating capital or generate new sales growth
  • B. Whether to reinvest in existing products, create new products or maximize profits with current products as long as possible
  • C. Whether to acquire competitors with greater market share or merge with more successful companies
  • D. Whether to increase sales, maximize distribution capacity or increase efficiency to meet growing demand


Answer : B

In what stage of the business lifecycle do companies typically begin standardizing procedures through policy creation?

  • A. Start-up
  • B. Growth
  • C. Mature
  • D. Decline


Answer : B

What metric should compensation professionals pay closest attention to for ensuring alignment between the compensation strategy and the HR and business strategies?

  • A. Variable pay costs as a percent of total compensation
  • B. Total compensation expense for the business, including base pay and variable pay
  • C. Reward costs as a percent of total operating costs
  • D. The organizationג€™s market comparatio


Answer : C

If employees have a significant impact on the bottom line, what type of pay mix is most appropriate?

  • A. A varying mix depending on employee influence on goals to provide the necessary incentive to maximize profits
  • B. 100% variable pay to motivate all employees to maximize productivity and sales
  • C. 90/10 for the majority of employees (base/variable) to share in the companyג€™s success with increased variable pay for management/executives to motivate employees to seek higher positions
  • D. High base pay and low variable pay to ensure predictability of total compensation expense


Answer : A

Which of the following factors has the greatest impact on how aggressive a stance (high vs. low) an organization will take in terms of where it positions itself against the market with its compensation strategy?

  • A. The industry it operates in
  • B. The bottom line
  • C. The organizational headcount
  • D. The risk tolerance of compensation leaders


Answer : B

What most accurately describes a reason why organizations use financial reports?

  • A. To differentiate company financial data from industry competitors to prevent loss of proprietary information
  • B. To provide subjective information to key constituents that reflects the companyג€™s performance in the most favorable manner depending on stakeholder priorities
  • C. To create a historical record of financial performance and identify trends that may justify changes in strategy
  • D. To promote consistency of communication regarding company performance and value


Answer : D

Information on the annual report shows results for what time period?

  • A. The calendar year from January 1 to December 31
  • B. The fiscal year, which matches the calendar year from January 1 to December 31
  • C. The fiscal year, which shows results from July 1 to June 30
  • D. The fiscal year, which may match the calendar year or may be a different 12-month period, depending on the company


Answer : D

Quarterly financial reports typically include data for a given quarter compared to what?

  • A. The previous quarter
  • B. The budget
  • C. The same quarter in the previous year, plus the current six-month or nine-month cumulative comparables
  • D. The aggregate performance of the same quarter in the previous three years


Answer : C

How do quarterly reports most commonly compare to the annual report?

  • A. The cumulative information on the four quarterly reports adds up to the information on the annual report.
  • B. The quarterly reports are more detailed. The annual report provides similar data in summary form.
  • C. The annual report is required and the quarterly reports, while commonly used, are optional.
  • D. The quarterly reports are not as detailed as annual reports, and might not match due to changing accounting estimates over the year.


Answer : D

What information is found on the balance sheet?

  • A. A list of what is owned, what is owed and the equity of an entity
  • B. The revenues and expenses incurred by an entity over a period of time
  • C. The change during the reporting period in cash and cash equivalents
  • D. The profitability of the company as of a specific date


Answer : A

Which financial statement or combination of statements provide(s) the most comprehensive view of the companyג€™s financial situation?

  • A. The balance sheet
  • B. The income statement
  • C. The cash flow statement and the income statement
  • D. The cash flow statement, along with the balance sheet and income statement


Answer : D

What do profits, equity and debt all have in common?

  • A. They are all reported on the balance sheet.
  • B. They are all sources of capital.
  • C. They all incur the same costs to the business.
  • D. Nothing. Each of these is a different financial metric.


Answer : B

What is the top line or starting point of an organizationג€™s income?

  • A. Gross profit
  • B. Revenue
  • C. Net income
  • D. Operating profit


Answer : B

Which of the following is the earnings available to equity owners after paying debt and taxes?

  • A. EBIT
  • B. EPS
  • C. Net income
  • D. Operating profit


Answer : C

Page:    1 / 6   
Exam contains 78 questions
Expand All

Talk to us!

Have any questions or issues ? Please dont hesitate to contact us

[email protected]

Certlibrary.com is owned by MBS Tech Limited: Room 1905 Nam Wo Hong Building, 148 Wing Lok Street, Sheung Wan, Hong Kong. Company registration number: 2310926
Certlibrary doesn't offer Real Microsoft Exam Questions. Certlibrary Materials do not contain actual questions and answers from Cisco's Certification Exams.
CFA Institute does not endorse, promote or warrant the accuracy or quality of Certlibrary. CFA® and Chartered Financial Analyst® are registered trademarks owned by CFA Institute.
Terms & Conditions | Privacy Policy