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Amicus Therapeutics, Inc., is a biopharmaceutical company that develops drugs for the treatment of various diseases, including Parkinson’s disease. Amicus Therapeutics reported the following financial data (in thousands) for three recent years: a. Determine the monthly cash expenses for Year 3, Year 2, and Year 1. Round to one decimal place. b. Determine the ratio of cash to monthly cash expenses for Year 3, Year 2, and Year 1 as of December 31. Round to one decimal place. c. Based on (a) and (b), comment on Amicus Therapeutics’ ratio of cash to monthly operating expenses for Year 3, Year 2, and Year 1.

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Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124

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BuyFindarrow_forward

Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124
Chapter 8, Problem 28E
Textbook Problem
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Amicus Therapeutics, Inc., is a biopharmaceutical company that develops drugs for the treatment of various diseases, including Parkinson’s disease. Amicus Therapeutics reported the following financial data (in thousands) for three recent years:

Chapter 8, Problem 28E, Amicus Therapeutics, Inc., is a biopharmaceutical company that develops drugs for the treatment of , example  1

  1.        a.            Determine the monthly cash expenses for Year 3, Year 2, and Year 1. Round to one decimal place.
  2.       b.            Determine the ratio of cash to monthly cash expenses for Year 3, Year 2, and Year 1 as of December 31. Round to one decimal place.
  3.        c.            Chapter 8, Problem 28E, Amicus Therapeutics, Inc., is a biopharmaceutical company that develops drugs for the treatment of , example  2 Based on (a) and (b), comment on Amicus Therapeutics’ ratio of cash to monthly operating expenses for Year 3, Year 2, and Year 1.

(a)

To determine

Compute monthly cash expenses for Year 3, Year 2 and Year 1.

Explanation of Solution

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.

Monthly cash expenses are those cash expenses that are estimated from the operating activities section of the statement of the cash flows...

(b)

To determine

Compute the ratio of cash to monthly cash expenses.

(c)

To determine

Comment ratio of cash to monthly operating expenses for Year 3, Year 2, and Year 1.

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Financial Accounting
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