What are the requirements set out by the covenants on the bank loan? There are a few ratios that we need to calculate. They want our current ratio to be at least 1.5 and they want our long-term liabilities to equity ratio to be under 1.2. Dividends may not be distributed unless earnings exceed five times interest. Loans may not be made either to Ms. Mallard or to Mr. Bailey. Salary increases for Ms. Mallard and Mr. Bailey must be approved by the bank. We are in compliance with all of those things. In fact our current ratio is over 4.6.