Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Business Acumen For Comp Professional > Business Acumen Comp Professional > Flashcards

Business Acumen Comp Professional Flashcards

1
Q

 What are the key competencies for compensation professionals?

A

Understanding HR
Mastering resource management
Understanding finance

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q



A
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Which of the following is a compensation competency for financial management?

A Manages procurement and contracting

B access is current and future staffing needs

C Sources appropriate data for fact-based decision making

D Effectively partners with colleagues

A

A . manages procurement and contracting

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Which of the following best describes an employee with strong business acumen?
A. Task oriented, cautious, perfectionist
B. Extroverted, impulsive, intelligent
C. Inquisitive, insightful, confident
D. Timid, ignorant, well-intentioned

A

C. Inquisitive insightful confident

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

How can the compensation professional address emotional reactions from stakeholders?
A. Describe how the compensation plan is in alignment with the organizational culture
B. Present the negotiation strategy to explain how the plan was developed
C. Offer reassurance that the plan is the employees best interest
D. Focus on the data and the impact on the bottom line

A

D. Focus on the data and the impact on the bottom line

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

How might business acumen lead to career development
A. Develop confidence in decisiveness and compensation plan design
B. Interact successfully with other business functions for a lateral career move
C. Become an expert in the overall business strategy to gain an audience with the executive leader ship
D. Influence others to support the compensation perspective

A

A. Develop confidence and Decisiveness in the compensation plan design

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Define competitive strategy

A

Strategy is the broad framework of principles and approaches that guide the day-to-day decisions affecting the business, including how a company positions itself in the market

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What are the three focus areas of competitive strategy?

A

Operational excellence
product service leadership
customer intimacy

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

Define operational excellence

A

Price cost based strategy that can include a combination of price, quality, dependability, and ease of purchase, minimizing waste and rewarding efficiency

Lean, six sigma, process focused

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

Define product/service leadership

A

Innovation based strategy that focuses on product development and marketing exploration, creating the best products, generating more and better ideas and commercializing them faster than other competitors

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Define customer intimacy

A

Solutions based strategy that focuses on creating results for carefully selected customers by building bonds to meet or exceed customer needs in order to build loyalty

Example: grocery store develops discount system based on customer requests

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

Defined the correlation in the relative market share four box

Name the four market positions and where they fit in the box

A

Question mark - Low market share high-growth

Star - High market share high growth

Dog - Low market share low growth

Cash cow - Hi market share low growth

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

Name the four phases in the business lifecycle

A

Start up, growth, mature, decline

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is captured in a mission statement?

A, goals, directions and policies
B, plan to generate revenue
C, Intention or purpose of the business
D. How an organization works and who they are

A

C, Intention or purpose of the business

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

What question can be answered by looking at an organizations profit model?
A. Why will customers pay for our services
B. Why are we in business
C. Who are we
D. What kind of organization do we want to create

A

A. Why will customers pay for our services

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

Which of the following is a customer intimacy strategy?

A. Computer manufacturer creates high-volume, low price laptops for schools to send home with students
B. Grocery chains loyalty program generates coupons based on individual shoppers purchases
C. Fast food restaurant has consistent menus and food that is prepared according to uniform standards
D. An automobile company develops low cost fuel efficient vehicles incorporating the latest technology for comfort and convenience

A

B. Grocery chains loyalty program generates coupons based on individual shoppers purchases

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

What is the definition for a cash cow market position?

A. Hi market share and low growth potential
B. Low market share and high growth potential
C. Hi market share and high market potential
D. Low market share and low market potential

A

A. High market share and low growth potential

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

A company that manufactures household cleaners has recently patented a plant-based antibacterial bathroom cleaner. Although they have been in business for 20 years, they are looking to break into this up-and-coming market. They’re ramping up their marketing campaign to include free sample distributions and coupons. Which phase of the business lifecycle describes this company?

A

B. Growth

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

Why is it beneficial for an organizations compensation policy to be in alignment with its overall business strategy?
A. Organizations that pay above market are at higher risk for excessive compensation practices
B. Compensation is built on fixed and variable expenses that determine the competitive strategy
C. Most compensation professionals have additional responsibilities I need to be able to address business concerns for multiple angles
D. Compensation usually represents a significant expense in the budget

A

D. Compensation usually represents a significant expense in the budget

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

Why do organizations use financial reports

A

Standardize data across companies in industries

Promote consistency of financial communication

Provide information to key constituents (leaders, managers, shareholders, lenders, government regulators)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

Name the types of financial reports

A

Annual report

Quarterly report

Proxy and definitive 14 A

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

What’s the difference between the annual report and the quarterly report?

A

Annual report shows a full 12 month period Compared to the previous years

The quarterly report shows financial results for each three month period During the fiscal year - 

Quarterly reports are less detailed than annual reports

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

What two sections of the proxy definitive 14 a are important to the compensation professional?

A
  • The compensation discussion and analysis section to CDNA or the compensation committee of the board of directors must disclose, discuss and outline how the top executives of a company are paid

-A section on qualitative and quantitative risk related to the company and the markets in which it conducts business

24
Q

What are the three most important financial statements

A
  • balance sheet
  • Income statement
  • Cash flow statement
25
Q

Describe the balance sheet

A

Show statement of financial position as a specific date

List what is owned, what is owed, and equity

Shows the book value of a company

Represents the financial health of a company

26
Q

Describe the income statement

A

Covers a period of time

Shows revenues earned and expenses incurred over a period of time

Shows the profitability of a company

27
Q

What Is another name for the income statement

A

Profit and loss or P&L

28
Q

Describe the cash flow statement

A

Explains the change during the period in cash and cash equivalents

29
Q

What are the three sources of capital

A

Profits, money that comes in from sales

Equity, money that investors pay to own share of the business

Debt, money that is borrowed, usually in the form of loans or notes

30
Q

What are the four components to the time value of money

A

PV present value
FV Future value
N Period of time
% Interest rate

31
Q

Define accrual accounting

A

Revenues and expenses are recorded when they occur, regardless of when the cash flows.

32
Q

Which of the following statements applies to annual reports

A. Compares the current 12 month period to the same time in previous years

B. Breaks data into three month period for easy comparison

C. Contains fewer details than the quarterly report

D. Always follows a January to December calendar

A

A. Compares the current 12 month period to the same time in previous years

33
Q

Which financial statement shows the book value of the company

A. Income statement
B. Cash flow statement
C. Fiscal sheet
D. Balance sheet

A

D. Balance sheet

34
Q

Which of the following is an example of accrued revenue
A. Parts are scheduled for shipping and invoicing in two weeks, and sale is recorded today

B. Parts shipped an invoice today or not recorded is the sale until payment is received

C. Parts shipped an invoice today I recorded as a sale, even though payment is expected two weeks later

D. Parts of been ordered but sale is not recorded until payment has been received

A

c. Part shipped an invoiced today are record as a sale even though payment is expected two weeks later

35
Q

What is considered in forecasting

A

A forecast is the best guess of what the future holds for an organization.
Historical accounting and sales data, external factors such as market conditions and economic indicators

36
Q

What are the three forecasting questions

A

Profit

Growth

Investment

37
Q

Name the important financial concepts that round out how compensation and finance are related

A

Cost analysis
Profit measures
Cost leverage
Operating profit
Marginal cost

38
Q

What two types of costs are covered under cost analysis

A

Fixed costs

Variable costs

39
Q

Name the six profit measures

A
  1. Revenue
  2. Gross profit
  3. EBIT
  4. EBITDA
  5. Net income
  6. Earnings per share
40
Q

Define cost leverage

A

The relationship between revenue and cost.

If an organization grows its revenue faster than its cost, the profit growth will accelerate

Balance between revenue and cost

41
Q

Define operating profit

A

EBIT - Earnings before interest and taxes

42
Q

Define marginal cost

A

If revenue accelerates faster than cost or you have a high fixed cost, the cost per unit sold will decrease as you produce and sell more

43
Q

What metrics show working capital efficiency

A

Accounts receivable turnover/days receivable

Inventory turnover/days inventory

Payable turnover/days outstanding

44
Q

What are the market metrics (stock ratios)

A

Price to earnings ratio = Stock price/net earnings per share

Price to EBI tea/EBITDA ratio = Stock price/EBIT or EBITDA per share

Price to revenue ratio = Stock price/net sales per share

Market to book = Stock price/book value per share

TSR (Total shareholder return) - Measures total return shareholders of earned on their investment

45
Q

Define return on capital

A

Describes how effectively the organization is invest in capital

46
Q

What Metrics are used to measure return on capital

A

Return on equity,

return on assets,

return on capital/invested capital,

economic value added

47
Q

What are the four focus areas of a balanced scorecard

A

1 financials
2. Customers
3. Internal processes
4. Innovation and learning

48
Q

What are the three main components to budgeting

A
  1. Amount of revenue
  2. Cost to generate revenue
  3. Other expenses
49
Q

What is the definition of forecasting?

A. A plan for expenses and investments for the next year

B. The best guess of how the organization will perform in the future

C.
A summary of internal factors based on prior years

D. An estimate of the market for the upcoming quarter

A

B. A best guess of how the organization will perform in the future

50
Q

Which of the following would not be used for business analytics

Statistical analysis

Modeling

Quantitative analysis

Intuition

A

Intuition

51
Q

Which profit measure calculate how much the organization earns before financing the business?

Gross profit

EBIT

Net income

EBITDA

A

EBIT

52
Q

What does the price to revenue metric measure?

Stock price/EBIT per-share

Stock price/book value per share

Stock price/net earnings per share

Stock price/net sales per share

A

Stock price/net sales per share

53
Q

Which of the following is an example of a variable cost

Shipping Expenses

Corporate salaries

Rent

Audit fees

A

Shipping expenses

54
Q

What best describes the link between forecasting and budgeting

A

Budgeting uses forecasting to solidify the financial plan

55
Q

What’s the hierarchy of affective communication?

A

Awareness

Understanding

Acceptance

Commitment

Action

56
Q

What are the attributes of effective Collaboration

A

Contribute to organizational goals

Identify key influencers and decision makers

Consider how to help them achieve their objectives

Give special consideration to partnerships with finance

Business Acumen For Comp Professional (1 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions