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CIMAPRA19-F02-1 Exam - Topic 2 Question 113 Discussion

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

Question #: 113
Topic #: 2

[All CIMAPRA19-F02-1 Questions]

Which of the following defines the calculation of interest cover?

AProfit before interest and tax divided by finance costs

BFinance costs divided by profit before interest and tax

CProfit after tax divided by finance costs

DFinance costs divided by profit after tax

Show Suggested Answer

Suggested Answer: A

by Sommer at Jul 06, 2025, 04:16 AM

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Anglea

7 months ago

B makes more sense to me, not sure about A.

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Nakisha

7 months ago

Totally agree, A is the correct one!

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Chuck

8 months ago

Wait, is it really just A? Seems too simple.

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Terry

8 months ago

I thought it was C at first, but A sounds right now!

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Ilona

8 months ago

It's definitely A, that's the standard formula.

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Anastacia

8 months ago

I vaguely recall that interest cover is calculated using profit before interest and tax, so I would lean towards A, but I hope I’m not mixing it up!

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Alyce

8 months ago

I'm not entirely sure, but I feel like it could be B too? It’s confusing because they both involve profit and finance costs.

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Dewitt

9 months ago

I remember practicing a similar question, and I think it was definitely about profit before interest and tax, so A sounds right to me.

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Lavonna

9 months ago

I think interest cover is about how much profit we have to cover our finance costs, so it might be A?

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Galen

9 months ago

Ugh, finance questions are not my strong suit. I'll try to eliminate the options that don't make sense, then take an educated guess on the right answer.

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Bulah

9 months ago

Okay, I've got this. Interest cover is about how well a company can pay its interest expenses, so it's going to be a ratio of profit to finance costs. I'll carefully consider each option.

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Lucina

9 months ago

Hmm, I'm a bit unsure about this one. I'll need to review my notes on financial ratios to make sure I understand the concept of interest cover.

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Paris

9 months ago

This looks like a straightforward finance question. I'll focus on understanding the key terms like "interest cover" and think through the logic of the different options.

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Temeka

12 months ago

I'm feeling a bit like a finance ninja today. A is the correct answer, no doubt about it. Time to show off my accounting skills!

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Isabella

12 months ago

D is the way to go, my friends. Profit after tax is what really matters, so that's the number you want to compare to your finance costs.

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Roslyn

10 months ago

I disagree, B is the right choice. Finance costs divided by profit before interest and tax is the calculation for interest cover.

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Georgene

11 months ago

I think A is the correct answer. It's profit before interest and tax divided by finance costs.

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Muriel

12 months ago

Haha, this is a no-brainer! Of course, it's A. Who would divide profit after tax by finance costs? That's just silly.

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Freeman

10 months ago

User 1: I agree, it's definitely A. That's the correct formula for interest cover.

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Tracie

1 year ago

I'm going with B. Dividing finance costs by profit before interest and tax gives you the number of times those costs are covered, which is what interest cover is all about.

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Stephaine

1 year ago

Option A seems to be the correct answer. Interest cover is a measure of a company's ability to meet its interest payments, so it makes sense to divide profit before interest and tax by finance costs.

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Kayleigh

11 months ago

User 2: I agree, it makes sense to divide profit before interest and tax by finance costs.

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Ramonita

12 months ago

User 1: I think option A is the right answer.

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Valentin

1 year ago

I believe it's A because interest cover is about how well a company can pay its interest expenses.

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Franchesca

1 year ago

I'm not sure, but I think it's either A or B.

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Catarina

1 year ago

I agree with Tammara, A seems correct.

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Tammara

1 year ago

I think the answer is A.

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