Question
Crane Inc. (CI) has a short-term working capital loan to help finance its working capital. The terms of the loan enable CI to borrow an
Crane Inc. (CI) has a short-term working capital loan to help finance its working capital. The terms of the loan enable CI to borrow an amount of up to 35% of its inventory balance and 55% of its accounts receivable. One of the loan covenants requires that Cl maintain a current ratio greater than 2. Information related to CI's current assets and current liabilities is shown in the following table:
In thousands
2024
2023
Cash
$161
$224
Accounts receivable
2,054
1,230
Inventory
1,342
2,306
Other current assets
338
395
Accounts payable
1,402
1,343
Short-term bank loan
562
278
Other current liabilities
56
112
Based on the loan size requirement only of the loan covenant, how much more could CI have borrowed in each year? (Round amounts in thousand to 1 decimal place, e.g. 18.4.)
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