Ratio of Cash to Monthly Cash Expenses AcelRx Pharmaceuticals, Inc. (ACRX), deve

Question

Ratio of Cash to Monthly Cash Expenses AcelRx Pharmaceuticals, Inc. (ACRX), develops therapies for pain relief for a variety of patients, including cancer and trauma patients. The following data (in thousands) were adapted from financial statements of a recent year. Net cash flows from operating activities End of the year cash and cash equivalents Short-term investments *Includes U.S. short-term government securities that are readily convertible to cash 1. Compute the monthly cash expenses. Round to the nearest thousand dollars. $(17,580) 8,963 32,190 thousand 2. Compute the ratio of cash to monthly cash expenses, excluding short-term investments. Round your answers to one decimal place months 3. Including short-term investments as part of cash and cash equivalents, compute the ratio of cash to monthly cash expenses. Round your answers to one decimal place months

Explanation / Answer

1 Monthly cash expenses = 17580/12= $1465 thousand 2 Ratio of cash to monthly cash expenses = 8963/1465= 6.1 months 3 Ratio of cash to monthly cash expenses =(8963+32190)/1465= 28.1 months

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