Farm Store, Inc. reported the following data in its December 31, 2011 annual report.
Required:
(1) What is the company's "cash burn" per month?
(2) What is the company's ratio of cash to monthly cash expenses?
(3) Interpret the ratio you computed in part 2. What are the implications for Farm Store, Inc.
Definitions:
Zero-Coupon Bonds
Bonds that do not pay interest during their lifetime but are issued at a discount to their face value, thus generating profit at maturity.
Yield
The income return on an investment, such as the interest or dividends received, expressed as a percentage of the investment's cost or current market value.
Minimum Number
The lowest quantity or amount that is allowed, required, or desired.
Coupon Rate
The percentage rate of interest a bond yields annually, based on its nominal value.
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