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Read the situation below and participate in the forum answering as requested. The ABX company applied for a line of credit to finance the production
Read the situation below and participate in the forum answering as requested.
The ABX company applied for a line of credit to finance the production operations of a new article. The bank denied the request because in its analysis of the financial statements the current ratio was less than 2.
2. Answer the following question:
Why do you think the bank considered that the current rate less than 2 was not adequate? What other factors could be considered when evaluating a current rate less than 2 as adequate?
3. In preparing your answer, explain what the current rate of a company measures and its importance for effective financial planning.
That is the only information that I have been provided. Many thanks if you are able to help me.
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