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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.
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 Cash and cash equivalents Net cash flows from operations Year 3 $79,749 (299,955) Year 2 $49,060 (213,695) Year 1 $187,026 (150,147) a. Determine the monthly cash expenses for Year 3, Year 2, and Year 1 (in thousands). Round to one decimal place. Year 3: Year 2: per month per month Year 1: per month 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. Year 3: Year 2: Year 1:1 months months months c. Based on (a) and (b), which of the following statements is correct. 1. Amicus has been able to support its operations by issuing additional stock. However, its negative cash flows have increased from Year 1 to Year 3. 2. Amicus has been able to support its operations generating positive cash flows. Its positive cash flows have increased from Year 1 to Year 3. Amicus has been able to support its operations generating positive cash flows. However, the cash flows generated are used to purchase short 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. Year 3: Year 2: Year 1: months months months c. Based on (a) and (b), which of the following statements is correct. 1. Amicus has been able to support its operations by issuing additional stock. However, its negative cash flows have increased from Year 1 to Year 3. 2. Amicus has been able to support its operations generating positive cash flows. Its positive cash flows have increased from Year 1 to Year 3. 3. Amicus has been able to support its operations generating positive cash flows. However, the cash flows generated are used to purchase short term investment. Feedback Check My Work a & b. Divide the negative cash flow from operations by 12 to obtain monthly cash expenses. Then calculate a ratio of cash as of year-end to monthly cash expenses. c. Consider how the elements affect each other and whether there is an increase or decrease in the ratio of cash to monthly cash expenses over the period
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