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CURRENT RATIO 2) The Stewart Company has $2,392,500 in current assets and $1,076,625 in current liabilities. Its initial inventory level is $526,350, and it will
CURRENT RATIO
2) The Stewart Company has $2,392,500 in current assets and $1,076,625 in
current liabilities. Its initial inventory level is $526,350, and it will raise funds as additional
notes payable and use them to increase inventory. How much can its short-term debt (notes
payable) increase without pushing its current ratio below 2.0? What would be the new quick ratio? What do you observe about your answer if compared to the original quick ratio?
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