Kips Bay Medical Inc. is a medical device company that develops, produces, and sells products used in coronary surgery. The following data (in thousands) were adapted from recent financial statements.

1. Compute the monthly cash expenses for Years 1-4. Round to nearest thousand.
2. Compute the ratio of cash to monthly cash expenses for Years 1-4. Round to one decimal place.
3. Including short-term investments as part of cash and cash equivalents, compute the ratio of cash to monthly cash expenses for Years 1-4. Round to one decimal place.
4. Comment on the results from parts (2) and (3).
5. Kips Bay Medical issued common stock in Year 4. Based upon (2) and (3), would you invest in Kips common stock in Year 4?

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Year 4 Year 3 Year 2 Year 1 Operations: Net income (loss) Net cash fl ws from operating activities $(5,607) (6,060) $(5,507) $(4,250) (5,026) (5,537) (4,203) (8,105) Balance sheet End of the year cash and cash equivalents Short-term investments* 3,138 457 2,316 9,403 2,684 6,211 2,957 947 Financing activities: Issued common stock 3,643 5,441 13,632 Includes various short-term securities that are readily convertible to cash.