Sims computing has 1625000 in current assets and 636000 in, Ask an Expert

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Sims Computing has $1,625,000 in current assets and $636,000 in current liabilities. They wish to increase their inventory levels from the current level of $400,000. They will borrow on a short term note payable to acquire the additional inventory. A covenant in an existing bond indenture agreement requires that the firm maintain a current ratio of at least 2. How much can their notes payable increase while still maintaining a current ratio of 2? In other words, what is the maximum additional.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92058727

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