Ratio of Cash to Monthly Cash Expenses Financial data for Abrams Company follow:   For Year Ending December 31 Cash on December 31 $63,360 Cash flow from operations  (79,200) a.  Compute the ratio of cash to monthly cash expenses.

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Deferred Tax

Deferred tax is an estimated future tax which is made while preparing accounts. It is estimated as a result of past and present transactions in the financial statements. It is not the actual tax which needs to be paid or refundable from the revenue authority, it is an accounting entry. It exists because of the difference between accounting profits and taxable profits.