Pilger corporation has cash on hand at year-end of $201,000 and a negative cash flow from operations of $144,000. what is the ratio of cash to monthly cash expenses?
a. 7.2 months
b. 1.4 months
c. 12.0 months
d. 16.8 months
given:
cash on hand at year-end=$201000
negative cash flow = $ 144000
solutions:
Monthly cash expenses =negative cash flow
=144000/12=12000
ratio of cash to monthly cash expenses=cash on hand at year-end /Monthly cash expenses
= 201,000/12000=16.75=16.80(approx)
ratio of cash to monthly cash expenses=16.8 months
