Financial Analysis Flashcards

A pay equity audit finds 40 employees underpaid by an average of $3,000. What is the base remediation budget before payroll taxes?

Answer: $120,000

40 × $3,000 = $120,000 in base pay adjustments.

Why should pay equity remediation budgets include more than the base salary adjustments?

Answer: Benefits and payroll taxes tied to salary also go up

Payroll taxes, retirement matches, and other pay-linked benefits rise along with base pay.

A cost-benefit ratio of 0.6 for a proposed program means:

Answer: Benefits are only 60% of costs

A benefit-cost ratio below 1.0 means benefits are smaller than costs.

Which method spreads shared DEI program costs to business units based on the activities that drive those costs?

Answer: Activity-based costing

Activity-based costing assigns overhead based on actual drivers such as participants or hours used.

A company gets 30% of revenue from a fast-growing multicultural consumer segment but has little workforce representation from it. This gap is mainly a:

Answer: Market and customer-insight risk

Low representation can limit insight into key customers and put revenue growth at risk.

Which practice most strengthens the credibility of DEI financial metrics in front of a board?

Answer: Using consistent definitions, baselines, and audited data sources

Consistent, auditable methods let leaders trust and compare results over time.

If a $100,000 benefit expected one year from now is discounted at 10%, its present value is closest to:

Answer: $90,909

PV = $100,000 / 1.10 ≈ $90,909.