Business
Engineering
Math
Science
Social Science
Apache: Days’ cash on hand Apache Corporation is an independent energy company that explores, develops, and produces oil and gas products. Apache operates worldwide, including in the United States, Canada, and the North Sea. The profitability of the oil and gas business is highly influenced by the price of crude oil and natural gas, and by the success in finding oil and gas. Selected financial information for Apache for three recent years follows (in millions): Year 3 Year 2 Year 1 Balance sheet, end of year: Cash $ 769 $ 1,906 $ 160 Income statement: Operating expenses 16,575 11,156 11,724 Depreciation expense 10,158 6,289 6,881 A. Determine the days’ cash on hand for each year. (Round all calculations to one decimal place.) B. Interpret the results. C. What are some ways a company can respond to a liquidity squeeze?
Financial & Managerial Accounting
Solutions
Financial & Managerial Accounting
Apache: Days’ cash on hand
Apache Corporation is an independent energy company that explores, develops, and produces oil and gas products. Apache operates worldwide, including in the United States, Canada, and the North Sea. The profitability of the oil and gas business is highly influenced by the price of crude oil and natural gas, and by the success in finding oil and gas. Selected financial information for Apache for three recent years follows (in millions):
| Year 3 | Year 2 | Year 1 | |
| Balance sheet, end of year: | |||
| Cash | $ 769 | $ 1,906 | $ 160 |
| Income statement: | |||
| Operating expenses | 16,575 | 11,156 | 11,724 |
| Depreciation expense | 10,158 | 6,289 | 6,881 |
- A. Determine the days’ cash on hand for each year. (Round all calculations to one decimal place.)
- B. Interpret the results.
- C. What are some ways a company can respond to a liquidity squeeze?
(a)
Cash and cash equivalents: Cash is the money readily available in the form of currency. Cash equivalents are the near-cash items, which are readily convertible into cash. Cash equivalents have a maturity period of three months, or less than 3 months. Cash and cash equivalents are reported in the Current assert section of the balance sheet.
Examples of cash equivalents
- Certificates of deposit
- U.S. government securities
- Corporate notes and bonds
- Commercial paper
To determine: Days’ cash on hand for three years.
Explanation of Solution
Days’ cash on hand is determined using below given formula:
(b)
To interpret: The results.
(c)
Chapter 7 Solutions
Additional Business Textbook Solutions
Corporate Financial Accounting
Accounting Information Systems
Cornerstones of Financial Accounting
Brief Principles of Macroeconomics (MindTap Course List)
Essentials of Business Communication (MindTap Course List)
Fundamentals of Financial Management, Concise Edition (MindTap Course List)
Principles of Microeconomics (MindTap Course List)
Fundamentals Of Financial Management, Concise Edition (mindtap Course List)
Probability and Statistics for Engineering and the Sciences
Principles of Economics (MindTap Course List)
Foundations of Business (MindTap Course List)
ECON: MICRO4 (New, Engaging Titles from 4LTR Press)
STATISTICS F/BUSINESS+ECONOMICS-TEXT
Fundamentals of Financial Management (MindTap Course List)
Principles of Macroeconomics (MindTap Course List)
Financial And Managerial Accounting
Financial Accounting
College Accounting, Chapters 1-27
Essentials of Economics (MindTap Course List)
Management, Loose-Leaf Version
Contemporary Marketing
Accounting Information Systems
Intermediate Accounting: Reporting And Analysis
Managerial Accounting: The Cornerstone of Business Decision-Making
College Accounting (Book Only): A Career Approach
MKTG 12:STUDENT ED.-TEXT
College Accounting (Book Only): A Career Approach
Financial Accounting
Accounting (Text Only)
Financial & Managerial Accounting
Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)
Exploring Economics
Fundamentals of Financial Management (MindTap Course List)
Statistics for Business & Economics, Revised (MindTap Course List)
College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
Principles of Macroeconomics (MindTap Course List)
Pkg Acc Infor Systems MS VISIO CD
Survey of Accounting (Accounting I)
Corporate Financial Accounting
PAYROLL ACCT.,2019 ED.(LL)-TEXT
Practical Management Science
Purchasing and Supply Chain Management
Economics (MindTap Course List)
Microeconomics
Economics For Today
Cornerstones of Cost Management (Cornerstones Series)
Macroeconomics
Managerial Accounting
Macroeconomics: Private and Public Choice (MindTap Course List)
Microeconomics: Private and Public Choice (MindTap Course List)
Micro Economics For Today
Understanding Management (MindTap Course List)
Economics: Private and Public Choice (MindTap Course List)
