SASB FSA LEVEL II TEST GUIDE
QUESTIONS AND ANSWERS
Activity metric - Answer- NNN is used in a given SASB Standard to quantify the scale of
a business, used in conjunction with accounting metrics to normalize data and facilitate
comparison.
actual impacts - Answer- financial impacts that are already occurring or that currently
affect a company's financial statements
acute impacts - Answer- high magnitude financial impacts that are associated with one-
time events. They tend to have direct and immediate effects on a company's financial
statements
Churn - Answer- in business, the rate at which customers no longer do business with a
company. A measure of customer attrition.
comparative analysis - Answer- the process of comparing a company's performance on
the same metric(s) against its own past performance, the performance of peer
companies, and against benchmarks and targets, including industry averages, to
distinguish similarities and differences and inform projections
credit spread - Answer- the difference between the yield, or return, of two debt
instruments with the same time to maturity but different credit quality. It is used by
investors to determine the additional return required for taking on additional risk
decoupled rate structures - Answer- the disassociation of a utility's profits from the sale
of energy, enabling improved energy efficiency and often helping to reduce greenhouse
gas emissions
intangible assets - Answer- an asset that is non-monetary and not physical in nature,
but is identifiable and provides value to a business. Intellectual property, goodwill,
reputation, and other assets related to ESG factors are NNN
mean absolute deviation - Answer- a measure of the variability of a dataset, calculated
as the average distance between each datapoint and the mean
net working capital - Answer- a financial metric that represents a company's liquidity and
short-term financial health, calculated by subtracting total liabilities from total assets
normal distribution - Answer- characterized by a symmetrical bell curve, the distribution
that represents the most common probability of occurrence for randomly generated
datapoints.
QUESTIONS AND ANSWERS
Activity metric - Answer- NNN is used in a given SASB Standard to quantify the scale of
a business, used in conjunction with accounting metrics to normalize data and facilitate
comparison.
actual impacts - Answer- financial impacts that are already occurring or that currently
affect a company's financial statements
acute impacts - Answer- high magnitude financial impacts that are associated with one-
time events. They tend to have direct and immediate effects on a company's financial
statements
Churn - Answer- in business, the rate at which customers no longer do business with a
company. A measure of customer attrition.
comparative analysis - Answer- the process of comparing a company's performance on
the same metric(s) against its own past performance, the performance of peer
companies, and against benchmarks and targets, including industry averages, to
distinguish similarities and differences and inform projections
credit spread - Answer- the difference between the yield, or return, of two debt
instruments with the same time to maturity but different credit quality. It is used by
investors to determine the additional return required for taking on additional risk
decoupled rate structures - Answer- the disassociation of a utility's profits from the sale
of energy, enabling improved energy efficiency and often helping to reduce greenhouse
gas emissions
intangible assets - Answer- an asset that is non-monetary and not physical in nature,
but is identifiable and provides value to a business. Intellectual property, goodwill,
reputation, and other assets related to ESG factors are NNN
mean absolute deviation - Answer- a measure of the variability of a dataset, calculated
as the average distance between each datapoint and the mean
net working capital - Answer- a financial metric that represents a company's liquidity and
short-term financial health, calculated by subtracting total liabilities from total assets
normal distribution - Answer- characterized by a symmetrical bell curve, the distribution
that represents the most common probability of occurrence for randomly generated
datapoints.
