CIMAPRA17-BA3-1 Exam - Topic 3 Question 97 Discussion

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

Question #: 97
Topic #: 3

[All CIMAPRA17-BA3-1 Questions]

GG has the following statement of profit or loss extract for the year ended 31 December 20X3

What is the interest cover for GG for the year ended 31 December 20X3?

A2.8 times

B4.0 times.

C4.5 times

D3.5 times

Show Suggested Answer

Suggested Answer: B

by Scarlet at Sep 15, 2024, 06:37 PM

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Elbert

4 months ago

I’m not sure about these options, they look off.

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Audria

5 months ago

Wait, how can it be 4.5 times? That seems high!

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Fletcher

5 months ago

Nah, I’m leaning towards 3.5 times.

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Mariann

5 months ago

I think it's 4.0 times, seems right to me!

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Rutha

5 months ago

Interest cover is calculated by dividing EBIT by interest expense.

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Alexis

6 months ago

I’m leaning towards option B, 4.0 times, but I need to double-check the interest expense and profit figures to be sure.

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Kimberely

6 months ago

I feel like the answer could be around 4 times, but I can't recall the exact numbers from the statement.

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Felicidad

6 months ago

I think we used a similar question in practice where we had to find interest cover. I believe it's EBIT divided by interest expense.

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Audra

6 months ago

I remember we calculated interest cover in class, but I'm not sure if I should use EBIT or EBITDA for this question.

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Judy

6 months ago

Alright, time to put my financial analysis skills to the test. I'll work through this step-by-step and double-check my work to make sure I get the right answer.

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Helaine

6 months ago

Hmm, I'm a bit unsure about how to calculate the interest cover ratio. I'll need to review the formula and make sure I understand the key components.

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Sharika

6 months ago

This looks straightforward, I just need to calculate the interest cover ratio using the information provided in the profit or loss extract.

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Pamella

6 months ago

Okay, I think I've got this. The interest cover ratio is calculated by dividing the operating profit by the interest expense. Let me plug in the numbers and see which answer choice matches.

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Sabra

2 years ago

Alright, let's get serious here. This is a piece of cake! I got 2.8 times, so A is the way to go. Time to crush this exam!

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Rutha

1 year ago

User 3: A) 2.8 times it is then. Let's ace this exam!

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Lamonica

1 year ago

User 2: Yeah, I agree. Let's go with A).

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Carisa

1 year ago

I think A) 2.8 times is the correct answer.

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Wendell

2 years ago

Hold up, are we sure this is a real exam question? Looks like someone just made up some random numbers. I'm going with option B, 4.0 times - it's the safest bet!

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Alease

1 year ago

Let's see who got it right. The answer is actually B) 4.0 times.

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Callie

1 year ago

I'm not so sure about this question either. I'll go with option A, 2.8 times.

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Van

2 years ago

I see your point, but I still think it's option B, 4.0 times.

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Haley

2 years ago

I think it's a real question, just a tricky one. I'm going with option C, 4.5 times.

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Graciela

2 years ago

I'm not sure, but I think it might be 3.5 times. The interest cover calculation can vary depending on the interpretation of the financial data.

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Rutha

2 years ago

Hmm, 4.5 times? That seems a bit high. I double-checked the numbers and got 3.5 times. Must be option D.

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Carin

2 years ago

I agree, the answer is definitely C. 4.5 times. Gotta love these straightforward calculation questions!

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Sheridan

2 years ago

I agree with Rosamond, the interest cover seems to be 4.0 times based on the profit or loss extract.

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Judy

2 years ago

Let's see, interest cover is calculated as profit before interest and tax divided by interest expense. Based on the numbers given, I got 4.5 times. That's option C.

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