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 received		529		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 Heaven	Miami Paradise
Cash and cash equivalent	$6,405	$4,599

Required

Calculate the cash to daily expenses ratio for both companies.

Answer rating: 100% (QA)

Cash to daily expenses ratio... View the full answer