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Hello Tutor, i have an enquiry about the question 5 of Sep/Dec 2015 past year question, Cardale Industial Metal(CIM).
The answer for the total assets is minus out the trade payable even though the explanation said that “the current liability figure have been taken into account in the calculation because of the fact the managet have full control”Is it still need to minus out the trade payable even though the managet have control over it?
Hope I can get an explanation from you, much appreciate it 🙂The whole point about the way we measure the performance of division managers is to measure them on things that they control.
The first paragraph makes it clear that they control all the assets and control the current liabilities, and so they are all taken into account when measuring performance.
Is it the trade payable is part of current liability of the company? Why the answer is minus out the yrade payable figure? Is it because it is finding net asset? (total asset minus current liability)
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