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CIMAPRO19-P02-1 Exam - Topic 4 Question 55 Discussion

Juan is looking to invest in the mining industry. He has narrowed his options down to two rival companies, both with sales of 200m. Company A has an EBIT of 10m whereas Company B has an EBIT of 14m.This would suggest that Company B is the better investment but Juan is suspicious that Company B has more financial backing than Company A.Which ratios will tell him which company will use his investment the best?
A) Profit margin and B) R.O.C.E
C) Current ratio
D) Quick ratio

CIMAPRO19-P02-1 Exam - Topic 4 Question 55 Discussion

Actual exam question for CIMA's CIMAPRO19-P02-1 exam
Question #: 55
Topic #: 4
[All CIMAPRO19-P02-1 Questions]

Juan is looking to invest in the mining industry. He has narrowed his options down to two rival companies, both with sales of 200m. Company A has an EBIT of 10m whereas Company B has an EBIT of 14m.

This would suggest that Company B is the better investment but Juan is suspicious that Company B has more financial backing than Company A.

Which ratios will tell him which company will use his investment the best?

Show Suggested Answer Hide Answer
Suggested Answer: A, B

by Dorothy at Jul 26, 2022, 03:34 AM

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Blondell
8 months ago
Current ratio might not show the whole picture, though.
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Matt
9 months ago
Profit margin could also give insights into their actual profitability.
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Lai
9 months ago
Wait, but what if Company B's financial backing is just smoke and mirrors?
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Kaycee
9 months ago
I think R.O.C.E is key here to see how efficiently they use capital.
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Mindy
9 months ago
Company B has a higher EBIT, so it looks better on paper.
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Niesha
9 months ago
I practiced a similar question where we had to analyze financial ratios, and I think R.O.C.E was the key indicator we used to compare companies effectively.
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Shelia
9 months ago
I feel like the current ratio might not be the best choice here since it focuses more on liquidity rather than profitability or efficiency.
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Marjory
9 months ago
I’m not entirely sure, but I think profit margin could also be relevant. It shows how much profit a company makes from its sales, right?
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Gail
10 months ago
I remember we discussed how R.O.C.E can indicate how efficiently a company uses its capital. It might help Juan see which company is leveraging its investment better.
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Aja
10 months ago
Okay, I've got this. The question is asking what an administrator can add to a group, and the options are user, report, policy, and data class. Based on my understanding of administrative functions, the correct answer is user.
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Moon
10 months ago
SNMP is the way to go here. It's designed specifically for monitoring network devices and components.
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Ozell
10 months ago
Hmm, I'm a bit unsure about this one. I know $# holds the number of arguments, but I'm not 100% sure if that includes the script name itself or not. I'll have to think this through carefully.
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Francene
10 months ago
I think scaling the pods has something to do with ReplicaSets or Deployments, right? But I'm not fully sure which one it is.
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Shawnda
10 months ago
I think the Web Insight page might be the one I'm looking for, as it provides insights into the web traffic and performance of the Citrix ADC. But I'll need to confirm that it includes the specific metrics mentioned in the question.
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