Cash to Monthly Cash Expenses Ratio Capstone Turbine Corporation produces and sells turbine generators for such applications as
charging electric, hybrid vehicles. Capstone Turbine reported the following financial data for a recent year (in thousands): Net cash flows from operating activities $(23,018) Cash and cash equivalents 32,221a. Determine the monthly cash expenses. Round to one decimal place. b. Determine the ratio of cash to monthly cash expenses. Round to one decimal place.
c. Based on your analysis, do you believe that Capstone Turbine will remain in business?
a. $1,824.9 ($21,899 ÷ 12)
b. 18.3 months ($33,456 ÷ $1,824.9)
c. Capstone Turbine has cash to continue its operations for approximately 18.3 months.
b) To find the ratio of cash to monthly cash expenses, we have:
Ratio of cash to monthly cash expenses = Year end cash / monthly cash expenses
= $32,221 / $1,918.17
= 16.797
≈ 16.8 months
c) Yes, Capstone Turbine will remain in business because the calculated ratio above shows that they have cash to continue operations for approximately 16.8 months.
The correct answer is letter "B": generalized system of preferences.
Explanation:
Generalized System of Preferences or GSP is a set of preferential tariffs developed countries set to developing countries usually at a lower rate to boost the trade among those countries which mainly helps developing countries to increase the quality and number of their manufacturing companies.
