CIMA Exam CIMAPRA17-BA3-1 Topic 1 Question 94 Discussion

Actual exam question for CIMA's CIMAPRA17-BA3-1 exam

Question #: 94
Topic #: 1

[All CIMAPRA17-BA3-1 Questions]

ABC produces accounts to the year ended 31 December annually Extracts from the most recent financial statements are.

Which of the following ratios is a liquidity ratio?

ADebt/Equity x 100%

BOperating profit/Capital employed x 100%

CRevenue/Capital employed

DCurrent assets/Current liabilities

Show Suggested Answer

Suggested Answer: D

by Carolynn at Aug 05, 2024, 12:01 AM

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Timothy

9 months ago

D) Current assets/Current liabilities is the only one that doesn't sound like a joke. I mean, who would use 'Debt/Equity' as a liquidity ratio?

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Kimberlie

9 months ago

Definitely, 'Debt/Equity' sounds more like a leverage ratio.

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Kimberlie

9 months ago

I think 'Current assets/Current liabilities' is the correct liquidity ratio.

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Kimberlie

9 months ago

I agree, 'Debt/Equity' doesn't seem like a liquidity ratio.

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Ling

9 months ago

I agree, because it measures the company's ability to meet short-term obligations.

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Adaline

9 months ago

I'd go with D, can't go wrong with the old current ratio. The other options are just too random to be liquidity ratios.

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Nicolette

8 months ago

It's always good to stick with the basics when it comes to analyzing financial statements.

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Romana

8 months ago

Definitely, the current ratio is a key indicator of a company's liquidity position.

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Marg

9 months ago

Yeah, D is a classic ratio that measures a company's ability to cover its short-term liabilities with its short-term assets.

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Elin

9 months ago

I agree, D is the most straightforward choice for a liquidity ratio.

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Lai

10 months ago

I believe the correct answer is D) Current assets/Current liabilities.

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Ling

10 months ago

Yes, it is asking which ratio is a liquidity ratio.

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Honey

10 months ago

Gotta be D, the current ratio is a classic liquidity measure. The others are more profitability or efficiency ratios.

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Pauline

9 months ago

Yes, D is the current ratio which shows how easily a company can cover its short-term debts.

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Kaycee

10 months ago

I agree, D is the correct answer. It measures the company's ability to pay off its short-term liabilities.

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Lai

10 months ago

I think the question is about liquidity ratios.

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Miesha

10 months ago

D) Current assets/Current liabilities seems like the liquidity ratio to me. The others don't really fit the definition of a liquidity ratio.

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Ruthann

10 months ago

D) Current assets/Current liabilities seems like the liquidity ratio to me. The others don't really fit the definition of a liquidity ratio.

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Kattie

10 months ago

D) Current assets/Current liabilities

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Reid

10 months ago

C) Revenue/Capital employed

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Yun

10 months ago

B) Operating profit/Capital employed x 100%

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Lino

10 months ago

A) Debt/Equity x 100%

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