A firm as current assets of 5652540 and a current ratio of, Ask an Expert

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A firm as current assets of 5,652,540 and a current ratio of 3.60. The firm wishes to increae its level of inventory so it can boost sales. inventory is currenlty 565,254 but the CFO beleives the firm can finance additional inventory through an increase in its notes payable. Hovever, the firm has promised the bank that it would not lower its current ratio below 2 or else it would be in default on its loan. Assuming the firm raises the maximum amount of additional funds through its notes payable, how much additional inventory can the firm purchase without the current ratio dropping below 2?

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Financial Management, Finance

Category:- Financial Management
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