CIMA Exam CIMAPRA19-F02-1 Topic 1 Question 84 Discussion

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

Question #: 84
Topic #: 1

[All CIMAPRA19-F02-1 Questions]

Ratios have been produced below for EF for the year to 31 March:

Which TWO of the following could explain themovement in both gearing and ROCE?

AA rights issue on 31 March 20X3.

BA debt issue on 31 March 20X3.

CA revaluation upwards on the head office property on 1 April 20X2.

DA bonus issue of shares on 1 April 20X2.

EA bank loan to purchase new machinery on 31 March 20X3.

Show Suggested Answer

Suggested Answer: A, B, C, D

by Izetta at Apr 10, 2024, 04:34 PM

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Colette

1 months ago

I heard the exam was so tough, the invigilator had to call the ROCE ambulance. Ba dum tss!

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Elza

1 months ago

Aha, a bank loan to purchase new machinery! That would increase assets and likely affect both gearing and ROCE. This one's got my vote.

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Tamesha

8 days ago

I agree, a bank loan to purchase new machinery would definitely impact both gearing and ROCE.

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Justa

2 months ago

I'm not sure about option C and D. I think they might not have a direct impact on gearing and ROCE.

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Dorothy

2 months ago

A bonus issue of shares? That's like giving yourself a participation trophy. Definitely not the right answer here.

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Arthur

1 months ago

User 2: I agree, that could explain the movement in both gearing and ROCE.

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Dyan

2 months ago

User 1: I think the answer is A) A rights issue on 31 March 20X3.

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Frederic

2 months ago

The revaluation upwards on the head office property seems like a clear explanation for the increase in ROCE. Clever, but I'm not sure it would affect gearing.

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Walton

2 months ago

I agree with Hana. A rights issue and a debt issue would definitely impact gearing and ROCE.

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Hana

2 months ago

I think option A and B could explain the movement in both gearing and ROCE.

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Shawnda

2 months ago

Hmm, a rights issue would make sense as it would increase equity and reduce gearing. But a debt issue? That's a head-scratcher!

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Angelo

1 months ago

Bonus issue of shares might dilute ownership but not necessarily impact gearing or ROCE.

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Lorrine

1 months ago

A revaluation upwards on the head office property could impact ROCE positively.

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Gerry

1 months ago

Debt issue could increase gearing as it adds more debt to the company.

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Stephane

2 months ago

Rights issue would definitely increase equity and reduce gearing.

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