Cash and cash equivalents: Cash is the money readily available in the form of currency. Cash equivalents are the near-cash items, which are readily convertible into cash. Cash equivalents have a maturity period of three months, or less than 3 months. To compute: Monthly cash expenses for Year 3, Year 2 and Year 1.

Question

Cash to Monthly Cash Expenses Ratio Amicus Therapeutics, Inc., is a biopharmaceutical company that develops drugs for the treatment of various diseases, including Parkinson's disease. Amicus Therapeutics reported the following financial data (in thousands) for three recent years: For Years Ended December 31 Year 1 Year 3 Year 2 Cash and cash equivalents $69,485 $24,074 $43,640 Net cash flows from operations (100,139) (51,669) (45,794) a. Determine the monthly cash expenses for Year 3, Year 2, and Year 1 (in thousands). Round to one decimal place. Year 3: per month Year 2: per month per month Year 1: b. Determine the ratio of cash to monthly cash expenses for Year 3, Year 2, and Year 1 as of December 31. Round to one decimal place. months Year 3: months Year 2: months Year 1:

Answer 1

Question

Chapter 8, Problem 8.9CP

(a)

To determine

Cash and cash equivalents: Cash is the money readily available in the form of currency. Cash equivalents are the near-cash items, which are readily convertible into cash. Cash equivalents have a maturity period of three months, or less than 3 months.

To compute: Monthly cash expenses for Year 3, Year 2 and Year 1.

(b)

To determine

To compute: the ratio of cash to monthly cash expenses.

(c)

To determine

To comment: Ratio of cash to monthly operating expenses for Year 3, Year 2, and Year.

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