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Which Is the Better Choice for Evaluating Across Companies: Days

Question 110

Multiple Choice

Which is the better choice for evaluating across companies: Days' Cash on Hand or the amount in the company's Cash account?


A) The amount in the Cash account, because the company with the largest amount of cash is the most liquid.
B) Days' Cash on Hand, because it is calculated as a ratio, which expresses cash relative to the cash requirements of the business.
C) Days' Cash on Hand, because a daily cash amount is more accurate.
D) The amount in the Cash account, because companies with a lower cash balance are considered a greater credit risk.

Correct Answer:

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