Free WorldatWork C8 Practice Exam with Questions & Answers

Its ability to generate profits is unknown.

It is in the worst market position and has insufficient resources to continue operations.

It is unclear how to best utilize the high cash flow to sustain growth.

Its excess resources are often used to develop other businesses that may not be mission-critical.

Investors and Finance want to see money spent wisely. Legal must ensure compliance, and HR and operating departments want to see their needs taken into account to attract, retain and motivate a high quality workforce.

Operating departments and HR understand the company must live within its means and Finance cannot allocate funds to a budget if it is likely that profitability will be adversely affected.

Investors want to maximize gains and want to see compensation tightly controlled and Legal needs to ensure that compensation plans do not attract undue scrutiny.

Operating departments view compensation as it applies to them, HR must balance available resources to attract, retain and motivate employees and Finance knows the value of a motivated workforce and will provide the budget necessary to achieve it.

Recognize possible issues and concerns that will drive budget planning

Prepare quarterly and annual reports and their associated statements

Withhold payroll taxes for all elements of compensation

Anticipate future capital needs by determining when the organization will enter the next phase of the business lifecycle

Earnings

Shares

Market capitalization

Increased market value and reinvested dividends paid

Ensuring support from all internal and external stakeholders

Estimating results based on historical data

Using statistical methods to predict outcomes

Determining, sourcing and collecting appropriate data

A varying mix depending on employee influence on goals to provide the necessary incentive to maximize profits

100% variable pay to motivate all employees to maximize productivity and sales

90/10 for the majority of employees (base/variable) to share in the company’s success with increased variable pay for management/executives to motivate employees to seek higher positions

High base pay and low variable pay to ensure predictability of total compensation expense

They are all reported on the balance sheet.

They are all sources of capital.

They all incur the same costs to the business.

Nothing. Each of these is a different financial metric.

To differentiate company financial data from industry competitors to prevent loss of proprietary information

To provide subjective information to key constituents that reflects the company’s performance in the most favorable manner depending on stakeholder priorities

To create a historical record of financial performance and identify trends that may justify changes in strategy

To promote consistency of communication regarding company performance and value

The intention or purpose of the business

A descriptor for how the company works

The financial objectives of the organization

The plan for how the organization generates revenue and makes money

Being firm and uncompromising in your decision-making

Representing your view with data and relating it to business results

Finding a compromise that may not appease all stakeholders but does not give any one group or person everything they are seeking

Giving priority to perspectives based on the job or influence level of the stakeholders