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please solve a-c. Thank you! (Liquidity analysis) When firms enter inso loan agreenents with their bank, it is very common for the agreecnent to have
please solve a-c. Thank you!
(Liquidity analysis) When firms enter inso loan agreenents with their bank, it is very common for the agreecnent to have a restiction on the minimum curent ratio bhe fiem has to mainain So, it is important that the firm be aware of the effects of their decisions on the current rato. Consider the situation of Advanced Auloparts (AAP) in 2009 . The firm had total current assets of $1,910,561,800 and current baba6es of $1,364,687,000. a. What is the firm's current rato? b. If tho firm were to expand its investrent in inventory and finance the expansion by increasing accounts payable, how much could it increase its inventory without reducing the curent rato below 1.2? c. If the company needed to raise its curtent ratio to 1.5 by reducing ts investenent in current asseis and timutanocusly reducing accounts poyabie and shortterm debt, how much would thave to reduce ourrent assets to accomplish this goan? a. What is the firm's current rabo? The firmit current taso in (Round to one decimai place.) Step by Step Solution
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