Financial Analysis Flashcards

An organization finds women earn 18% less than men overall, but only 2% less after controlling for job, level, and tenure. The 18% figure is best described as the:

Answer: Unadjusted (raw) pay gap

The raw gap compares average pay without controls and mostly reflects differences in representation across jobs and levels.

A compa-ratio of 0.85 for an employee means their salary is:

Answer: 15% below the range midpoint

Compa-ratio = salary / range midpoint, so 0.85 means pay is 15% below the midpoint.

Which approach best isolates the financial impact of a new inclusive-hiring initiative?

Answer: Comparing results to a control group that did not get the initiative

A control group helps separate the initiative's effect from other things happening at the same time.

In the Phillips ROI Methodology, which level comes directly before calculating ROI?

Answer: Business impact

The Phillips model goes Reaction, Learning, Application, Impact, then ROI, with impact converted to money to get ROI.

Supplier diversity spend of $12 million out of total addressable spend of $150 million represents what percentage?

Answer: 8%

$12M / $150M = 0.08, or 8% of addressable spend.

Which statement about sensitivity analysis in a DEI business case is correct?

Answer: It shows how results change when key assumptions vary

Sensitivity analysis tests how strongly outcomes depend on assumptions like retention rate or discount rate.

A budget item that stays the same no matter how many employees attend a DEI program, such as a platform license, is a:

Answer: Fixed cost

Fixed costs do not change with activity volume within a relevant range.