A company's days' cash on hand is computed by dividing: Group of answer choices cash and short-term investments by daily cash operating expenses. cash by total cash operating expenses. cash, short-term investments, and accounts receivable by daily cash operating expenses. average cash over the period by daily cash operating expenses.

Question

Alejandro Velasquez

Business

6 November, 23:02

A company's days' cash on hand is computed by dividing: Group of answer choices cash and short-term investments by daily cash operating expenses. cash by total cash operating expenses. cash, short-term investments, and accounts receivable by daily cash operating expenses. average cash over the period by daily cash operating expenses.

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Answers (1)

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Hayden · Answer 1

The answer is A. cash and short-term investments by daily cash operating expenses

Explanation:

This is calculated as follows:

cash and short-term investments (cash equivalents) : daily cash operating expenses.

Cash equivalents are very short-term securities. They are very liquid and can be converted to cash very quickly. Examples are bank accounts short-term securities like treasury bills.

Days cash on hand is the number of days that a firm can afford to pay its operating expenses, given the amount of cash available.