In analysing the financial statements of Regis Ltd, the following ratios were calculated. 2023 2022 Current ratio 1.1:1 1.3:1 Quick ratio 0.5:1 0.7:1 Receivables turnover 30 days 45 days Inventory turnover 3 times 4 times Payables turnover 60 days 45 days Gross profit margin 10% 7% Return on equity 15% 12% Required: 1. Evaluate the entity's liquidity using the above information. 2. A condition of obtaining a long-term loan from the Scots Bank is that the current ratio should not fall below 1.25:1. Examine the effect on this condition if Regis Ltd considers two courses of action: either to borrow cash with a long-term loan of $90,000 from the bank; or by negotiating with creditors to settle $90,000 of payables with a long-term Note Payable. Assuming the current assets and current liabilities are 660,000 and 600,000 respectively, what course of action would you recommend and why