Question

The ratio of cash to monthly cash expenses can be used to _____. a.assess how long a company with negative cash flows from investing activities can continue to operate b.assess how long a company with negative cash flows from operations can continue to operate c.assess how long a company with positive cash flows from financing activities can continue to operate d.assess how long a company with positive cash flows from investing activities can continue to operate

Answer 1

Answer:

The correct option is C. which is assess how long a company with positive cash flows from financing activities can continue to operate

Explanation:

The ratio of cash to monthly cash expenses can be used to make assessment of a company whether how long it can determine without additional financing and positive cash flows generated from operations.

The formula of The ratio of cash to monthly cash expenses

= Cash s of year end ÷ Monthly Cash Expenses