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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?
Suggested Answer: C
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8 comments · newest first
ME
Mendy
1 year ago
Not sure about that, seems like they should still be comparable.
ME
Merri
1 year ago
Totally agree, return on capital employed is also impacted.
HU
Huey
1 year ago
Wait, how does acquiring 30% change interest cover?
MA
Mabel
1 year ago
I think earnings per share won't be comparable either.
VI
Vincenza
1 year ago
Operating profit margin will definitely be affected.
KR
Kristal
1 year 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.
MA
Markus
1 year 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.
IR
Irving
1 year 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.