Sheridan Inc. (SI) has a short-term working capital loan to help finance its working capital. The terms of the loan enable Sl to borrow an amount of up to 35% of its inventory balance and 55% of its accounts receivable. One of the loan covenants requires that Si maintain a current ratio greater than 2. Information related to Sl's current assets and current liabilities is shown in the following table: In thousands Cash Accounts receivable Inventory Other current assets Accounts payable Short-term bank loan Other current liabilities (a) Current ratio SI S 2023 $160 $225 2,004 1,228 2,332 Does Sl satisfy the loan covenant in both years? (Round answers to 2 decimal places, eg. 18.45) क 2024 1,366 333 391 1,381 1,339 558 278 56 113 2024 times V the loan covenant in 2024. the loan covenant in 2023 2023 times
Sheridan Inc. (SI) has a short-term working capital loan to help finance its working capital. The terms of the loan enable Sl to borrow an amount of up to 35% of its inventory balance and 55% of its accounts receivable. One of the loan covenants requires that Si maintain a current ratio greater than 2. Information related to Sl's current assets and current liabilities is shown in the following table: In thousands Cash Accounts receivable Inventory Other current assets Accounts payable Short-term bank loan Other current liabilities (a) Current ratio SI S 2023 $160 $225 2,004 1,228 2,332 Does Sl satisfy the loan covenant in both years? (Round answers to 2 decimal places, eg. 18.45) क 2024 1,366 333 391 1,381 1,339 558 278 56 113 2024 times V the loan covenant in 2024. the loan covenant in 2023 2023 times
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Please do not give image format
Transcribed Image Text:Current Attempt in Progress
Sheridan Inc. (SI) has a short-term working capital loan to help finance its working capital. The terms of the loan enable Sl to borrow an
amount of up to 35% of its inventory balance and 55% of its accounts receivable. One of the loan covenants requires that SI maintain a
current ratio greater than 2. Information related to Si's current assets and current liabilities is shown in the following table:
In thousands
Cash
Accounts receivable
Inventory
Other current assets
Accounts payable
Short-term bank loan.
Other current liabilities
(a)
Current ratio.
2024
SI
2023
$160
$225
2,004 1,228
2,332
1,366
333
1,381 1,339
558 278
113
56
Does Sl satisfy the loan covenant in both years? (Round answers to 2 decimal places, eg. 18.45)
391
2024
times
the loan covenant in 2024.
V the loan covenant in 2023
2023
times
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education