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

Actual exam question for CIMA's CIMAPRA19-F02-1 exam

Question #: 37
Topic #: 1

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?

AOperating profit margin.

BReturn on capital employed.

CEarnings per share.

DInterest cover.

Show Suggested Answer

Suggested Answer: C

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

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Mendy

6 months ago

Not sure about that, seems like they should still be comparable.

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Merri

6 months ago

Totally agree, return on capital employed is also impacted.

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Huey

6 months ago

Wait, how does acquiring 30% change interest cover?

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Mabel

6 months ago

I think earnings per share won't be comparable either.

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Vincenza

6 months ago

Operating profit margin will definitely be affected.

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Kristal

7 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

7 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

7 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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