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Question
Groceries R Us, Inc., reported the following data in its annual report.
Cash and cash equivalents $2,280,000
Cash flow from operations (240,000)
a. What is the company’s “cash burn” per month?
b. What is the company’s ratio of cash to monthly cash expenses?
c. Interpret the ratio you computed in part (b). What are the implications for Groceries R Us, Inc.?
Answer
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