CPHR Financial Analysis and Reporting 2

Question 1

Which financial ratio measures how efficiently a company uses its assets to generate revenue?

Accepted Answer

Asset turnover ratio

Answer

Asset turnover ratio (revenue ÷ total assets) measures how effectively a company generates sales from its asset base.

Question 2

When preparing a departmental budget, HR determines that employee benefits cost $420,000 and total compensation is $1,400,000. What is the benefits-to-compensation ratio?

Accepted Answer

30%

Answer

$420,000 ÷ $1,400,000 = 0.30, or 30% benefits-to-compensation ratio.

Question 3

In HR financial reporting, what does 'cost per hire' typically include?

Accepted Answer

Advertising, agency fees, relocation, and internal recruiting costs

Answer

Cost per hire encompasses all direct and indirect expenses associated with filling a position, including advertising, fees, relocation, and internal staff time.

Question 4

A company reports EBITDA of $500,000 and total debt of $2,000,000. What is the debt-to-EBITDA ratio?

Accepted Answer

4.0

Answer

$2,000,000 ÷ $500,000 = 4.0, indicating the company would need 4 years of EBITDA to retire its debt.

Question 5

Which budgeting approach requires every expense to be justified from zero each budget cycle rather than using the prior year as a baseline?

Accepted Answer

Zero-based budgeting

Answer

Zero-based budgeting starts from a zero base each period, requiring justification for all expenditures regardless of prior-year history.

(CPHR) Chartered Professional in Human Resources Practice Test

(CPHR) Chartered Professional in Human Resources Practice Test

CPHR Financial Analysis and Reporting 2