The inventory turnover ratio must be 4.0 or higher. The companys ratios are: current ratio, 2.3; debt-to-equity ratio, 0.6; times interest earned ratio, 7.1; and inventory turnover ratio, 3.7. Based on this information, the company was in default of its loan agreement because of the

1. current ratio.
2. debt-to-equity ratio.
3. times interest earned ratio.
4. inventory turnover ratio.