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2.You are analyzing the financial condition of a company to assess its ability to meet upcoming loan payments. You calculate its current ratio as 1.2.
2.You are analyzing the financial condition of a company to assess its ability to meet upcoming loan payments. You calculate its current ratio as 1.2. You also find that a major portion of accounts receivable is due from one client who has not made any payments in the past 12 months. Remov- ing this receivable from current assets lowers the current ratio to 0.7. What do you conclude?
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