Discuss CIMA CIMAPRA19-F02-1 Exam Topic 1 Question 64

Ratios calculated from thefinancial statements of ST Group for the years ended 31 August 20X7 and 20X6 are as follows:

Which of the followingwould have contributed to the movements in these ratios?

ADuring 20X7 ST Group acquired an associate which made arelatively smallprofit for the year.

BST Group extended its customer base which resulted in an increase inthe volume ofsales during 20X7.

CDuring 20X7 ST Groupincreased the useful life of its vehiclesto five years from four and adjusted the depreciation charge accordingly.

DThe fair value of an investment acquired in 20X7 and classified as fair value through profit or losshas increased in value by the year end.

Suggested Answer: B

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35 comments · newest first

Alton 12 months ago

Fair value gains can really boost those ratios!

Reta 12 months ago

Adjusting vehicle life for depreciation? Seems a bit fishy.

Yoko 1 year ago

Increased sales from a bigger customer base sounds promising!

Isabella 1 year ago

Definitely a factor, but how small was the profit?

Geraldo 1 year ago

ST Group acquired an associate in 20X7.

Truman 1 year ago

The fair value adjustment sounds familiar, but I can't quite remember how it directly affects the profit or loss ratios. I feel like it could be significant, though.

Kristian 1 year ago

I recall a practice question about depreciation changes affecting financial ratios, but I’m uncertain if increasing the useful life would have a major impact on the overall financial picture.

Tequila 1 year ago

I think extending the customer base and increasing sales volume would definitely improve the ratios, especially profitability ones. It seems like a strong option.

Rosendo 1 year ago

I remember we discussed how acquiring an associate could impact profit margins, but I'm not sure how significant that small profit would be on the overall ratios.

Kaitlyn 1 year ago

The key here is to focus on the specific entities mentioned in the question. I think the best approach is to carefully read through the options and select the three that are correct.

Rosina 1 year ago

I think the answer is B. The tag in the AndroidManifest.xml file is where you set the theme for the entire app.

Elliott 1 year ago

I think the key here is to focus on activities that help develop the team, so I'm leaning towards A - training and establishing ground rules.

Trina 1 year ago

This looks like a straightforward question about the URL to use in the requests.post() method. I'll need to carefully review the information provided in the exhibit and the answer choices to determine the correct URL.

Mabel 1 year ago

I remember practicing a similar question, and I ended up choosing PUT /people. I hope that's right!

Kayleigh 1 year ago

I feel like I read something about it assuming densities, so maybe that's the right answer? But I really can't remember clearly.

Mitsue 1 year ago

Option E: ST Group secretly started mining Bitcoin on their office computers. Boom, instant profits!

Alexis 1 year ago

↳ replying to Mitsue

D) The fair value of an investment acquired in 20X7 and classified as fair value through profit or loss has increased in value by the year end.

Carli 1 year ago

↳ replying to Mitsue

C) During 20X7 ST Group increased the useful life of its vehicles to five years from four and adjusted the depreciation charge accordingly.

Ciara 1 year ago

↳ replying to Mitsue

B) ST Group extended its customer base which resulted in an increase in the volume of sales during 20X7.

Kati 1 year ago

↳ replying to Mitsue

A) During 20X7 ST Group acquired an associate which made a relatively small profit for the year.

Tawanna 1 year ago

Hmm, I'm torn between Options B and C. Expanding the customer base or reducing the depreciation expense - either one could do the trick!

Vallie 1 year ago

I'm going with Option D. An increase in the fair value of an investment would boost the profits and make the ratios look better.

Alana 1 year ago

↳ replying to Vallie

It makes sense, the fair value adjustment would have a significant effect on the financial statements.

Valentin 1 year ago

↳ replying to Vallie

I agree, an increase in the fair value of an investment can definitely impact the ratios positively.

Christoper 1 year ago

↳ replying to Vallie

Option D seems like the most likely reason for the movements in the ratios.

Brinda 1 year ago

I think Option B is the correct answer. Increasing the customer base and sales volume would definitely improve the ratios.

Fabiola 1 year ago

↳ replying to Brinda

It makes sense that expanding the customer base would contribute to the movements in the ratios.

Pamella 1 year ago

↳ replying to Brinda

I agree, increasing the customer base can have a positive impact on the ratios.

Eric 1 year ago

↳ replying to Brinda

Option B is a good choice. More sales usually means better ratios.

Gabriele 2 years ago

But what about the fair value of the investment increasing? Wouldn't that also affect the ratios?

Flo 2 years ago

Option C is the correct answer. Extending the useful life of vehicles would reduce the depreciation charge, leading to higher profits and better ratios.

Mirta 1 year ago

↳ replying to Flo

That makes sense. It's important to consider how changes in depreciation methods can impact financial ratios.

Fabiola 1 year ago

↳ replying to Flo

Option C is the correct answer. Extending the useful life of vehicles would reduce the depreciation charge, leading to higher profits and better ratios.

Rossana 2 years ago

I agree with you, Charlette. More sales would definitely impact the ratios.

Charlette 2 years ago

I think the increase in sales volume would have contributed to the movements in the ratios.

CIMAPRA19-F02-1 Exam - Topic 1 Question 64 Discussion