Cash to Monthly Cash Expenses Ratio
Amicus Therapeutics, Inc., is a biopharmaceutical company thatdevelops drugs for the treatment of various diseases, includingParkinson’s disease. Amicus Therapeutics reported the followingfinancial data (in thousands) for three recent years:
| For Years Ended December 31 |
| Year 3 | Year 2 | Year 1 |
| Cash and cash equivalents | $11,760 | | $21,300 | | $37,310 | |
| Net cash flows from operations | (28,800) | | (36,000) | | (49,200) | |
a. Determine the monthly cash expenses for Year3, Year 2, and Year 1 (in thousands).
| Year 3: | $ per month |
| Year 2: | $ per month |
| Year 1: | $. per month |
b. Determine the ratio of cash to monthly cashexpenses for Year 3, Year 2, and Year 1 as of December 31. Round toone decimal place.
| Year 3: | months |
| Year 2: | months |
| Year 1: | months |
c. Based on (a) and (b), which of the followingstatements is correct.
| 1. | Amicus has been able to support its operations by issuingadditional stock. However, its negative cash flows have increasedfrom Year 1 to Year 3. |
| 2. | Amicus has been able to support its operations generatingpositive cash flows. Its positive cash flows have increased fromYear 1 to Year 3. |
| 3. | Amicus has been able to support its operations generatingpositive cash flows. However the cash flows generated are used topurchase short term investment. |
