Crane Inc. (CI) has a short-term working capital loan to help finance its working capital. The terms of the loan enable CI to borrow anamount of up to 35% of its inventory balance and 55% of its accounts receivable. One of the loan covenants requires that CI maintaina current ratio greater than 2. Information related to CI's current assets and current liabilities is shown in the following table:In thousandsCashAccounts receivableInventoryOther current assets,Accounts payableShort-term bank loanOther current liabilities(a)Current ratio2024CI$1612,0541,3423381.402562562023$2241,2302,3063951.343Does CI satisfy the loan covenant in both years? (Round answers to 2 decimal places, eg. 18.45)2781122024timesthe loan covenant in 2024the loan covenant in 20232023times

The liquidity ratio used to assess a company's capacity to meet short-term or one-year-due…

Answered: Crane Inc. (CI) has a short-term…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 19P

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