Financial Accounting

Learn the toughest concepts covered in your Financial Accounting class with step-by-step video tutorials and practice problems.

Financial Statement Analysis

Ratios: Cash to Monthly Cash Expenses

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Ratios: Cash to Monthly Cash Expense

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Problem

The Liquid Company had a cash balance at the end of the current year of $14,511. If the monthly cash expenses total $3,495, how long could Liquid stay in business before going bankrupt, assuming no cash inflows?

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Problem

Tougher Company’s had the following data for 2018 and 2017:

What was the increase or decrease in the ratio of cash to monthly cash expenses in 2018?