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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Justa

12 days 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

13 days ago

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

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Frederic

14 days 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

15 days ago

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

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Hana

16 days ago

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

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Shawnda

18 days 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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Stephane

12 hours ago

Rights issue would definitely increase equity and reduce gearing.

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