Question

You are considering investing in the bed and breakfast (B&B) industry. Two B&Bs, Burleigh Heaven and Miami Paradise, have been shortlisted for your consideration.

Both companies are about the same size, with similar assets and sales. The following is extracted from their statements of cash flows for the year ended 31 December 2019.

  Burleigh Heaven Miami Paradise

Receipts from customers$95,964 $59,148

Cash payment to suppliers and employees-68,682 -43,117

Interest received529 520

Interest and other costs of finance paid-6,118 -17,881

Income tax paid-14,012 -10,758

The statements of financial position as at 31 December 2019 show the following balance for cash and cash equivalent for the two companies.

Burleigh HeavenMiami Paradise

Cash and cash equivalent$6,405$4,599

Required

Calculate the cash to daily expenses ratio for both companies.

(Round answers to 1 decimal place, e.g. 15.6)

Answer 1

Answer Cash to daily - : o expenses ratio cash to daily expenses saatio Cash & cash equivalents daily operational expenses Burleigh Heaven, comof vio daily expenses oratio $6405 $68682 0.09 0.1 Miami paradise I coof to daily expenses ratío $ 4599 $ 43117 011 0.