A firm has total assets of $311,770 and net fixed assets of $167,532. The average daily operating costs are $2,980.

A firm has total assets of $311,770 and net fixed assets of $167,532. The average daily operating costs are $2,980. What is the value of the interval measure?

Expert Solution

Interval measure, measures the firm's liquidity

Interval measure = [Total Assets - Net Fixed Assets] / average daily operating costs

Interval measure = [$311,770 - $167,532] / $2,980

Interval measure = $144,238 / $2,980

Interval measure = 48.40 days

Interval measure of 48.40 days means that the firm has sufficient liquid assets to cover its operating costs for the next 48.40 days

jeff jeffy answered 2 years ago

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