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CIMAPRA19-F02-1 Exam - Topic 1 Question 37 Discussion

LMis preparing itsconsolidated financial statements for the year ended 30 April 20X5. Duringthe year LM acquired 30% of the equitysharesof AB givingitsignificant influence overAB.LMconductedratio analysis comparing the financial performance of the group for 30 April 20X4 and 20X5.Whichof the following ratios wouldnot becomparable as a result of the acquisition of AB?
C) Earnings per share.
A) Operating profit margin.
B) Return on capital employed.
D) Interest cover.

CIMAPRA19-F02-1 Exam - Topic 1 Question 37 Discussion

Actual exam question for CIMA's CIMAPRA19-F02-1 exam
Question #: 37
Topic #: 1
[All CIMAPRA19-F02-1 Questions]

LMis preparing itsconsolidated financial statements for the year ended 30 April 20X5. Duringthe year LM acquired 30% of the equitysharesof AB givingitsignificant influence overAB.

LMconductedratio analysis comparing the financial performance of the group for 30 April 20X4 and 20X5.

Whichof the following ratios wouldnot becomparable as a result of the acquisition of AB?

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Suggested Answer: C

by Glen at May 08, 2022, 08:17 PM

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Mendy
7 months ago
Not sure about that, seems like they should still be comparable.
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Merri
7 months ago
Totally agree, return on capital employed is also impacted.
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Huey
8 months ago
Wait, how does acquiring 30% change interest cover?
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Mabel
8 months ago
I think earnings per share won't be comparable either.
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Vincenza
8 months ago
Operating profit margin will definitely be affected.
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Kristal
8 months ago
This question seems straightforward - I just need to identify the two options that would improve the company's short-term cash flow. I'll carefully consider each choice and select the best two.
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Markus
8 months ago
Hmm, this question seems straightforward, but I want to make sure I understand the concept fully before answering. Let me think this through step-by-step.
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Irving
8 months ago
I think one of the correct answers is definitely about detecting when the workload has reached a threshold. It feels familiar, like a practice question we had on capacity management.
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