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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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concept
Ratios: Cash to Monthly Cash Expense
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2
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?
A
4.15 months
B
3.12 months
C
6.33 months
D
Not enough information
3
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?
A
Increase 5.3 months
B
Decrease 5.3 months
C
Increase 8.1 months
D
Decrease 8.1 months