A financial manager who needs to find out how long it will take before their firm runs out of cash if no further cash comes in should consider the ________________.
A) Current ratio.
B) Quick ratio.
C) Cash ratio.
D) Net working capital to total assets ratio.
E) Interval measure.

Question

Quizplus · Accepted Answer

The interval measure is the correct choice because it calculates how long the company can continue to operate using its current liquid assets without needing additional cash inflow. This measure is specifically designed to estimate the time a firm can sustain operations with its available financial resources, making it the most relevant metric for a financial manager trying to determine how long the firm can last before running out of cash.

A Financial Manager Who Needs to Find Out How Long