Amazon Fresh Vine Wine Balance sheet, end of year: Cash $36,220 $16.1 Short-term investments 59,829 Income statement: Operating expenses Depreciation expense Statement of cash flows: Cash flows from (used in) operations 444,943 10.5 34,296 46,327 (5.8) a. Determine the days' cash on hand for Amazon and Fresh Vine Wine. Assume a 365-day year. If required, round all computations to one decimal place and use in subsequent calculations. Round final answers to one decimal place. Amazon Fresh Vine Wine Days' Cash on Hand 85.4 days 559.7 X days b. With regard to the cash on hand which of these statements is correct? 1. Fresh Vine Wine appears to have greater cash liquidity to support its operations. 2. Amazon appears to have greater cash liquidity to support its operations. 3. There is no significant difference in the days' cash on hand between the two companies. 4. Greater cash liquidity means the business is highly profitable. Feedback Check My Work a. Days' Cash on Hand = (Cash and Short-Term Investments) +[(Operating Expenses - Depreciation Expense) + 365 days] b. This ratio measures how long a company could survive if its sources of revenue were to decline significantly. A higher number of days implies a higher liquidity and is viewed favorably by creditors.