Concept #1: Ratios: Cash to Monthly Cash Expense
Practice: 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?
Practice: 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?