The Mitchem marble Company has a target current ratio of 2.2 but has experienced some difficulties financing its expanding sales in the past few months. At present, the firm has a current ratio of 2.7 and current assets of $2.38 million. If Mitchem expands its receivable and inventories using its short-term line of credit, how much additional short-term funding can it borrow before its current ratio standard is reached?

The Mitchem marble Company has a target current ratio of 2.2 but has experienced some difficulties financing its expanding sales in the past few months. At present, the firm has a current ratio of 2.7 and current assets of $2.38 million. If Mitchem expands its receivable and inventories using its short-term line of credit, how much additional short-term funding can it borrow before its current ratio standard is reached?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter17: The Management Of Cash And Marketable Securities

Section: Chapter Questions

Problem 2P

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