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A company has a loan covenant that requires them to maintain a current ratio of 2.0 or better. They currently have cash of 1.6 m,
A company has a loan covenant that requires them to maintain a current ratio of 2.0 or better. They currently have cash of 1.6 m, accounts receivable of $2.2M, Inventory of $1.1M, notes payable of $500,000 and accrued taxes and wages of $390,000. Given thes figures, what is the maximum level of accounts payable the company can have and still meet the current ratio restriction?
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