question archive During 2012, Pierport Inc
During 2012, Pierport Inc
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During 2012, Pierport Inc. has monthly cash expenses of $400,000. On December 31, 2012, the cash balance is $3,600,000.
a. Compute the ratio of cash to monthly cash expenses.
b. Based on (a), what are the implications for Pierport Inc.,?
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a. 9 months ($3,600,000/$400,000)
b. At the current rate of operations, Pierport has 9 months of cash remaining. Pierport should either restructure its operations or begin planning on raising additional financing in order to continue in business.
