
(a)
To compare: The size of companies
(b)
Days’ cash on hand: This is a financial metric which measures number of days a company would pay its cash operating expenses, if revenue declines. Days’ cash on hand of 50 days or greater is considered to be ideal.
Formula to compute days’ cash on hand:
To compute: Days’ cash on hand for Incorporation N, Incorporation LA, and Incorporation UA
(c)
To comment: On the cash sufficiency for the three companies
(d)
To identify: The company with greatest cash liquidity
(e)
To analyze: The reason for using ratios to compare the cash sufficiency, rather the cash balances

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Chapter 7 Solutions
Corporate Financial Accounting
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