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June 2017 Q1

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AAA Exams › June 2017 Q1

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  • April 22, 2018 at 4:06 pm #448453
    samko
    Member
    • Topics: 18
    • Replies: 23
    • ☆

    Hi mike
    In Q1, we are requesting to use analytical procedures to evelaute risk of materia misstatement.
    In the official answer, gearing ration in Fy2016 is (80/80+ 221)x100=26.6%
    Why is 80/80?

    Thanks in advance in your guidance

    April 22, 2018 at 5:10 pm #448456
    MikeLittle
    Keymaster
    • Topics: 27
    • Replies: 23200
    • ☆☆☆☆☆

    There should be brackets round (80 + 221) to give us the denominator of 301

    Gearing can be calculated as borrowing as a percentage of total capital employed and total capital employed is calculated as (borrowings + shareholders’ funds)

    Does that explain it?

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