Question 2

Read the article below and use it to answer the questions that follow

Consistent progress by Geraldine Panapasa

1. AIRPORTS Fiji Ltd has consistently made record profits in the past three years with a net profit before tax of $16.02million for 2013, $14.13m in 2012 and $12.24m in 2011.

2. AFL executive chairman Faiz Khan attributed the results to a combination of revenue increases in aeronautical and non-aeronautical streams, and improvement in cost structures.

3. He said revenues increased by $880,342 or 1.4 per cent last year compared with 2012.

4. In terms of cash and cash equivalents, he said this increased to $44.5million at the end of July this year, compared with $34.2m as of December 31, 2013.

5. "Expenditures were reduced in 2013 by $1,013,365 or 2.1 per cent compared with 2012. That is significant progress, however, we are not completely there yet as we continue to redefine our revenue and cost structures.

6. "Although the overall expenditure decreased, the notable expenditure that increased was the record payroll cost in 2013 that went in excess of $14.27m.

7. "The reason noted for the increased payroll cost was the increment in pay of most of our workforce in the past two years," he said yesterday.

8. Mr Khan said shareholders equity last year increased by $13.1m compared with the previous year.

9. He said it was cash flow positiveness that had been the major factor in their financial performance, adding profit did not equate to cash flow.

10. "You can have $16m profit but no cash at bank. You may have spent all your money in capital investments, often times not wisely to create a longer term impairment or depreciation effect," Mr Khan said.

Acknowledgement This article appeared in the Fiji Times on Saturday, August 30, 2014

Required Briefly distinguish among the following terms, explaining how they are used in the article

a) Derived measurement, fiat measurement and fundamental measurement (see paragraphs 9 and 10)

b) Interval scale and ratio scale (see paragraphs 3 and 5)

c) Accuracy and reliability (see paragraph 1)