CIMA Exam CIMAPRA17-BA3-1 Topic 1 Question 94 Discussion

Actual exam question for CIMA's CIMAPRA17-BA3-1 exam

Question #: 94
Topic #: 1

[All CIMAPRA17-BA3-1 Questions]

ABC produces accounts to the year ended 31 December annually Extracts from the most recent financial statements are.

Which of the following ratios is a liquidity ratio?

ADebt/Equity x 100%

BOperating profit/Capital employed x 100%

CRevenue/Capital employed

DCurrent assets/Current liabilities

Show Suggested Answer

Suggested Answer: D

by Carolynn at Aug 05, 2024, 12:01 AM

Limited Time Offer

25%

Off

Get Premium CIMAPRA17-BA3-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Timothy

5 months ago

D) Current assets/Current liabilities is the only one that doesn't sound like a joke. I mean, who would use 'Debt/Equity' as a liquidity ratio?

upvoted 0 times

Kimberlie

4 months ago

Definitely, 'Debt/Equity' sounds more like a leverage ratio.

upvoted 0 times

...

Kimberlie

4 months ago

I think 'Current assets/Current liabilities' is the correct liquidity ratio.

upvoted 0 times

...

Kimberlie

4 months ago

I agree, 'Debt/Equity' doesn't seem like a liquidity ratio.

upvoted 0 times

...

Ling

5 months ago

I agree, because it measures the company's ability to meet short-term obligations.

upvoted 0 times

...

Adaline

5 months ago

I'd go with D, can't go wrong with the old current ratio. The other options are just too random to be liquidity ratios.

upvoted 0 times

Nicolette

4 months ago

It's always good to stick with the basics when it comes to analyzing financial statements.

upvoted 0 times

...

Romana

4 months ago

Definitely, the current ratio is a key indicator of a company's liquidity position.

upvoted 0 times

...

Marg

4 months ago

Yeah, D is a classic ratio that measures a company's ability to cover its short-term liabilities with its short-term assets.

upvoted 0 times

...

Elin

5 months ago

I agree, D is the most straightforward choice for a liquidity ratio.

upvoted 0 times

...

Lai

5 months ago

I believe the correct answer is D) Current assets/Current liabilities.

upvoted 0 times

...

Ling

5 months ago

Yes, it is asking which ratio is a liquidity ratio.

upvoted 0 times

...

Honey

5 months ago

Gotta be D, the current ratio is a classic liquidity measure. The others are more profitability or efficiency ratios.

upvoted 0 times

Pauline

5 months ago

Yes, D is the current ratio which shows how easily a company can cover its short-term debts.

upvoted 0 times

...

Kaycee

5 months ago

I agree, D is the correct answer. It measures the company's ability to pay off its short-term liabilities.

upvoted 0 times

...

Lai

5 months ago

I think the question is about liquidity ratios.

upvoted 0 times

...

Miesha

6 months ago

D) Current assets/Current liabilities seems like the liquidity ratio to me. The others don't really fit the definition of a liquidity ratio.

upvoted 0 times

Ruthann

5 months ago

D) Current assets/Current liabilities seems like the liquidity ratio to me. The others don't really fit the definition of a liquidity ratio.

upvoted 0 times

...

Kattie

5 months ago

D) Current assets/Current liabilities

upvoted 0 times

...

Reid

5 months ago

C) Revenue/Capital employed

upvoted 0 times

...

Yun

5 months ago

B) Operating profit/Capital employed x 100%

upvoted 0 times

...

Lino

5 months ago

A) Debt/Equity x 100%

upvoted 0 times

...