Financial Indicators

CR – Nov 2014 – L3 – SC – Q6a – Introduction to Corporate Reporting

Evaluate factors indicating going concern threats and propose financial restructuring solutions.

Question

An entity is normally viewed as a going concern. It is assumed that the entity has neither the intention nor the desire of liquidation or of curtailing materially the scale of its operations.

However, if the going concern is threatened, the financial statements would be prepared on a different basis.

Required:

State the factors that indicate an organisation may no longer be a going concern under the following categories:
(i) Financial (ii) Operational (iii) Legal or regulatory (6 Marks)

Answer

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Tags: Financial Indicators, Financial restructuring, Going Concern, Legal Factors, Operational Issues
Level: Level 3

Topic: Introduction to Corporate Reporting
Series: NOV 2014

CR – Nov 2021 – L3 – Q2a – Earnings Per Share (IAS 33)

Define earnings quality, explain its assessment, and list factors impacting it.

Question

a. Past surveys revealed that one of the most important financial indicators in evaluating ordinary shares is the expected changes in earnings per share (EPS). Corporate earnings are a key component of these financial indicators, and, as far as investors are concerned, the quality of earnings is important in measuring a company’s prospects. The quality of earnings can be affected by several factors, which are at the discretion of management. A simple or complex capital structure also plays a vital role in the assessment of earnings quality and EPS.

Required:

i. What does “quality of earnings” connote, and how can it be assessed?
(5 Marks)

ii. What are the factors that can affect the quality of earnings of an organisation?
(3 Marks)

Answer

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Tags: Capital structure, Earnings Quality, EPS, Financial Indicators
Level: Level 3

Topic: Earnings Per Share (IAS 33)

AAA – Nov 2011 – L3 – SA – Q10 – Review of Subsequent Events and Going Concern Assumptions

Identifies a factor that may not indicate a going concern issue.

Question

Which ONE of the following may not necessarily be a symptom of a going concern problem?

A. Redemption of debentures
B. Dividends in arrears
C. Existence of long overdue debtors
D. Heavy dependence on short-term funds for long-term needs
E. Excessive reliance on a supplier or customer

Answer

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Tags: Audit Assessment, Financial Indicators, Going Concern, Risk Factors
Level: Level 3

Topic: Review of Subsequent Events and Going Concern Assumptions
Series: NOV 2011

FR – Nov 2022 – L2 – Q6c – Limitations of EPS

Identify three limitations of EPS as an indicator of performance.

Question

EPS is probably the single most important indicator of an entity’s performance.
Required:
State THREE of the limitations of EPS.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Entity Performance, EPS, Financial Indicators, Limitations
Level: Level 2

Topic: Earnings Per Share (IAS 33)
Series: NOV 2022

CR – Nov 2014 – L3 – SC – Q6a – Introduction to Corporate Reporting

Evaluate factors indicating going concern threats and propose financial restructuring solutions.

Question

An entity is normally viewed as a going concern. It is assumed that the entity has neither the intention nor the desire of liquidation or of curtailing materially the scale of its operations.

However, if the going concern is threatened, the financial statements would be prepared on a different basis.

Required:

State the factors that indicate an organisation may no longer be a going concern under the following categories:
(i) Financial (ii) Operational (iii) Legal or regulatory (6 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Financial Indicators, Financial restructuring, Going Concern, Legal Factors, Operational Issues
Level: Level 3

Topic: Introduction to Corporate Reporting
Series: NOV 2014

CR – Nov 2021 – L3 – Q2a – Earnings Per Share (IAS 33)

Define earnings quality, explain its assessment, and list factors impacting it.

Question

Required:

i. What does “quality of earnings” connote, and how can it be assessed?
(5 Marks)

ii. What are the factors that can affect the quality of earnings of an organisation?
(3 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Capital structure, Earnings Quality, EPS, Financial Indicators
Level: Level 3

Topic: Earnings Per Share (IAS 33)

AAA – Nov 2011 – L3 – SA – Q10 – Review of Subsequent Events and Going Concern Assumptions

Identifies a factor that may not indicate a going concern issue.

Question

Which ONE of the following may not necessarily be a symptom of a going concern problem?

A. Redemption of debentures
B. Dividends in arrears
C. Existence of long overdue debtors
D. Heavy dependence on short-term funds for long-term needs
E. Excessive reliance on a supplier or customer

Answer

Find Related Questions by Tags, levels, etc.

Tags: Audit Assessment, Financial Indicators, Going Concern, Risk Factors
Level: Level 3

Topic: Review of Subsequent Events and Going Concern Assumptions
Series: NOV 2011

FR – Nov 2022 – L2 – Q6c – Limitations of EPS

Identify three limitations of EPS as an indicator of performance.

Question

EPS is probably the single most important indicator of an entity’s performance.
Required:
State THREE of the limitations of EPS.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Entity Performance, EPS, Financial Indicators, Limitations
Level: Level 2

Topic: Earnings Per Share (IAS 33)
Series: NOV 2022

Question Tag: Financial Indicators

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CR – Nov 2014 – L3 – SC – Q6a – Introduction to Corporate Reporting

Evaluate factors indicating going concern threats and propose financial restructuring solutions.

CR – Nov 2021 – L3 – Q2a – Earnings Per Share (IAS 33)

Define earnings quality, explain its assessment, and list factors impacting it.

AAA – Nov 2011 – L3 – SA – Q10 – Review of Subsequent Events and Going Concern Assumptions

Identifies a factor that may not indicate a going concern issue.

FR – Nov 2022 – L2 – Q6c – Limitations of EPS

Identify three limitations of EPS as an indicator of performance.

CR – Nov 2014 – L3 – SC – Q6a – Introduction to Corporate Reporting

Evaluate factors indicating going concern threats and propose financial restructuring solutions.

CR – Nov 2021 – L3 – Q2a – Earnings Per Share (IAS 33)

Define earnings quality, explain its assessment, and list factors impacting it.

AAA – Nov 2011 – L3 – SA – Q10 – Review of Subsequent Events and Going Concern Assumptions

Identifies a factor that may not indicate a going concern issue.

FR – Nov 2022 – L2 – Q6c – Limitations of EPS

Identify three limitations of EPS as an indicator of performance.

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CR – Nov 2014 – L3 – SC – Q6a – Introduction to Corporate Reporting

Evaluate factors indicating going concern threats and propose financial restructuring solutions.

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CR – Nov 2021 – L3 – Q2a – Earnings Per Share (IAS 33)

Define earnings quality, explain its assessment, and list factors impacting it.

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AAA – Nov 2011 – L3 – SA – Q10 – Review of Subsequent Events and Going Concern Assumptions

Identifies a factor that may not indicate a going concern issue.

You're reporting an error for "AAA – Nov 2011 – L3 – SA – Q10 – Review of Subsequent Events and Going Concern Assumptions"

FR – Nov 2022 – L2 – Q6c – Limitations of EPS

Identify three limitations of EPS as an indicator of performance.

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CR – Nov 2014 – L3 – SC – Q6a – Introduction to Corporate Reporting

Evaluate factors indicating going concern threats and propose financial restructuring solutions.

You're reporting an error for "CR – Nov 2014 – L3 – SC – Q6a – Introduction to Corporate Reporting"

CR – Nov 2021 – L3 – Q2a – Earnings Per Share (IAS 33)

Define earnings quality, explain its assessment, and list factors impacting it.

You're reporting an error for "CR – Nov 2021 – L3 – Q2a – Earnings Per Share (IAS 33)"

AAA – Nov 2011 – L3 – SA – Q10 – Review of Subsequent Events and Going Concern Assumptions

Identifies a factor that may not indicate a going concern issue.

You're reporting an error for "AAA – Nov 2011 – L3 – SA – Q10 – Review of Subsequent Events and Going Concern Assumptions"

FR – Nov 2022 – L2 – Q6c – Limitations of EPS

Identify three limitations of EPS as an indicator of performance.

You're reporting an error for "FR – Nov 2022 – L2 – Q6c – Limitations of EPS"

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