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CIMAPRA19-F02-1 Exam - Topic 1 Question 89 Discussion

GH is a listed entity which holds equity shares in one subsidiary and one associate.Information extracted from the most recent financial statements is as follows:What is the interest cover for the year?
A) 9.6 times and B) 10.7 times and C) 11.7 times and D) 8.5 times

CIMAPRA19-F02-1 Exam - Topic 1 Question 89 Discussion

Actual exam question for CIMA's CIMAPRA19-F02-1 exam
Question #: 89
Topic #: 1
[All CIMAPRA19-F02-1 Questions]

GH is a listed entity which holds equity shares in one subsidiary and one associate.

Information extracted from the most recent financial statements is as follows:

What is the interest cover for the year?

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Suggested Answer: A, B, C, D

by Eura at May 31, 2024, 01:36 PM

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Andrew
8 months ago
Interest cover is calculated as EBIT divided by interest expense.
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Izetta
8 months ago
Wait, how did they get 11.7 times? That seems off.
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Roxane
8 months ago
I think C is too high, not sure about that one.
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Alecia
8 months ago
I'm going with B, seems reasonable!
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Viva
9 months ago
Interest cover is a key metric for assessing financial health.
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Corrina
9 months ago
I feel like the answer is around 10 times, but I can't remember if it was closer to 10.7 or 11.7. I need to double-check my calculations!
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Gracie
9 months ago
I'm a bit unsure about how to interpret the financial statements. Did we need to adjust for any non-recurring items before calculating?
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Elliott
9 months ago
I think I practiced a similar question last week, and I got a different answer. I hope I remember the right figures this time!
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Antonio
9 months ago
I remember we calculated interest cover in class, but I can't quite recall the exact formula. Was it EBIT divided by interest expense?
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Ethan
9 months ago
I think I know how to do this. I'll start by finding the operating profit and interest expense from the financial statements, then calculate the interest cover.
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Viola
9 months ago
Hmm, I'm a bit unsure about how to approach this. Do I need to use any specific formulas or ratios?
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Terina
9 months ago
Okay, this seems straightforward. I just need to calculate the interest cover ratio using the information provided.
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Lavina
10 months ago
This looks like a standard financial analysis question. I'm confident I can work through the steps to find the correct answer.
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Gerald
10 months ago
I'm not too sure about this one. I'll have to think it through carefully.
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Karl
10 months ago
Okay, let's see. BPDU guard sounds like it could be the right answer, since it's specifically meant to protect the spanning tree from unauthorized devices. But I want to double-check the other options just to be sure.
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Hollis
10 months ago
Tricky question. I'll read carefully and remember: they want the most accurate technical definition that matches the description.
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Bo
1 year ago
Interest cover? That's easy, I got this! I'm going to go with option B, it just seems like the most logical choice. Hey, did you hear about the accountant who got hit by a car? He had a balance sheet.
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Charlie
1 year ago
Haha, that accountant joke is funny!
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Anjelica
1 year ago
I agree, option B seems like the best choice.
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Kimberlie
1 year ago
I think the interest cover is 10.7 times.
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Antonio
1 year ago
Ah, this is a tricky one. I need to make sure I have the formula right. Maybe I should use a calculator to double-check my work. Better safe than sorry, you know?
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Haydee
1 year ago
I got 9.6 times as the interest cover for the year.
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Lashawnda
1 year ago
I calculated it as 11.7 times.
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Cordelia
1 year ago
I think the interest cover for the year is 10.7 times.
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Nida
1 year ago
Wait, isn't the interest cover just the operating profit divided by the interest expense? I think I'm going to go with option C, that seems like the most reasonable answer based on the information provided.
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Brittni
1 year ago
Great, option C it is then. Thanks for clarifying how to calculate interest cover.
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Brittni
1 year ago
I agree, let's go with option C for the interest cover for the year.
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Latrice
1 year ago
Option C does seem like the most reasonable answer based on the information provided.
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Jerlene
1 year ago
I think you're right, interest cover is calculated by dividing operating profit by interest expense.
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Kristel
1 year ago
Hmm, let me think about this. I'm pretty sure the interest cover is calculated by dividing the operating profit by the interest expense. This should give us a good indication of the company's ability to cover its interest payments.
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Samuel
1 year ago
I don't think it's that low.
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Isaac
1 year ago
D) 8.5 times
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Nana
1 year ago
I believe it's closer to that number.
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Marylin
1 year ago
C) 11.7 times
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Twanna
1 year ago
That sounds more reasonable.
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Sherman
1 year ago
B) 10.7 times
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Gertude
1 year ago
I think it might be higher than that.
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Arlean
1 year ago
A) 9.6 times
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Nydia
1 year ago
I'm going with 11.7 times because the higher the better for interest cover.
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Kattie
1 year ago
I believe it is 9.6 times.
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Hollis
1 year ago
I think the interest cover is 10.7 times.
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