Financial Analysis Flashcards

A leadership coaching program costs $50,000 and generates $200,000 in monetary benefits. Using the standard ROI formula, what is the program's ROI?

Answer: 300%

ROI = (benefits − costs) ÷ costs × 100 = ($150,000 ÷ $50,000) × 100 = 300%.

In the Phillips ROI Methodology, which evaluation level converts business impact data into monetary values and compares them to program costs?

Answer: Level 5: ROI

Level 5 adds ROI to Kirkpatrick's four levels by comparing monetized benefits with fully loaded costs.

A coaching initiative produced $150,000 in benefits at a cost of $50,000. What is its benefit-cost ratio (BCR)?

Answer: 3:1

BCR = total benefits ÷ total costs = $150,000 ÷ $50,000 = 3:1.

Which technique most credibly isolates the effect of coaching from other factors that influence performance?

Answer: Comparing coached participants with a similar uncoached control group

A control group shows what would have happened without coaching, so the effect can be attributed to the program.

When calculating the fully loaded cost of an executive coaching program, which cost is most often overlooked?

Answer: The value of participants' time spent in coaching sessions

Participant salary and benefits for time away from work are a real cost, but people often leave them out.

A coaching program costs $60,000 and is expected to generate $10,000 in benefits per month. What is the payback period?

Answer: 6 months

Payback period = investment ÷ periodic benefit = $60,000 ÷ $10,000 = 6 months.

Under the Phillips methodology, how should improved team engagement be handled if it cannot be credibly converted to a monetary value?

Answer: Reported as an intangible benefit alongside the ROI

Benefits that can't be credibly monetized are reported as intangibles instead of being forced into the ROI figure.