MNO has calculated its return on capital employed ratio for 20X4 and 20X5 as 41%...

CIMA F2 Question Answer

MNO has calculated its return on capital employed ratio for 20X4 and 20X5 as 41% and 56% respectively.

Taking each statement in isolation, which would explain the movement in the ratio between the 2 years?

In 20X5 the average interest rate on borrowing decreased compared to 20X4.

In 20X4 an onerous contract was provided for and this provision did not change in 20X5.

In 20X5 the increase in value of MNO's head office was reflected in the financial statements.

In 20X4 an unused building was sold at a price in excess of its carrying value.

F2 PDF/Engine

Get 75% Discount on All Products, Use Coupon: "ac75sure"