Ratio of Cash to Monthly Cash ExpensesFinancial data for Bonita Company follows: For Year EndedDecember 31Cash on December 31$187,180 Cash flow from operations(458,400) a. Compute the ratio of cash to monthly cash expenses. Round your answer to one decimal place.fill in the blank 1 monthsb. Interpret the results computed in (a).

Ratio analysis: It refers to the quantitative technique of financial analysis that allows gaining an insight into the operational efficiency, liquidity, and profitability of the company by analyzing its financial statement including income statement and balance sheet. a. Calculation of the ratio of cash to monthly cash expense as follows: Result of the above:b. The ratio of cash to monthly cash expense implies that the company needs to generate more positive cash flows from its operations.

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Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter7: Receivables And Investments

Section: Chapter Questions

Problem 7.17E

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Ratio of Cash to Monthly Cash Expenses

Financial data for Bonita Company follows:

	For Year Ended December 31
Cash on December 31	$187,180
Cash flow from operations	(458,400)

a. Compute the ratio of cash to monthly cash expenses. Round your answer to one decimal place.
fill in the blank 1 months

b. Interpret the results computed in (a).

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