Optimizing liquidity, securing Anya's medical practice.
Dr. Sharma's practice generates significant revenue, and she diligently maintains a substantial cash balance. However, the high fixed costs associated with running a medical practice, coupled with her considerable student loan debt ($280,000), create a situation where a superficial view of cash on hand might be misleading. She needs a clear picture of her short-term solvency to ensure she can meet immediate obligations without disrupting operations or incurring penalties.
Using the Cash Ratio Calculator, we assessed Dr. Sharma's current liabilities against her most liquid assets (cash and marketable securities). The initial calculation revealed a cash ratio of 0.8, indicating she might struggle to cover immediate liabilities with available cash. By using the Agent Labor Arbitrage Calculator to find ways to better utilize existing medical staff more effectively, and adjusting her spending, we aimed to improve her cash ratio to a more comfortable 1.2 within the next year.
The Cash Ratio Calculator was populated with Dr. Sharma's most recent balance sheet data, specifically focusing on cash, marketable securities, and current liabilities. Sensitivity analysis was performed by adjusting various liability figures and forecasting revenue fluctuations.
$20,000 increase in working capital within one year, reduced risk of short-term financial strain
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