Cambridge Construction Plc follows the percentage-of-completion method for reporting longterm contract revenues. The percentage of completion is based on the cost of materials shipped to the project site as a percentage of total expected material costs. Cambridges major debt agreement includes restrictions on net worth, interest cover age, and minimum working capital requirements. A leading analyst claims that the company is buying its way out of these covenants by spending cash and buying materials, even when they are not needed. Explain how this may be possible. Can Cambridge improve its Z score by behaving as the analyst claims above? Is this change consistent with economic reality?