Your firm successfully issued new debt last​ year, but the debt carries covenants.​ Specifically, you can only pay dividends out of earnings made after the debt issue and you must maintain a minimum quick​ (acid-test) ratio   (Current Assets−Inventory)/Current Liabilities   of 1.2. Your net income this year was $69.7 million. Your cash is $10.3 ​million, your receivables are $8.4 ​million, and your inventory is $5.2 million. You have current liabilities of $18.6 million. What is the maximum dividend you could pay​ (in cash and in​ stock) this year and still comply with your​ covenants?

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Balance Sheet Regulations

A balance sheet is a financial statement that shows the position of a company's assets and liabilities on a specific date. The balance sheet is prepared after preparing the statement of profit and loss statement (income statement). The balance sheet and other financial statements differ in the sense that the balance sheet shows the financial position at any given point in time. In contrast, the other financial statements show the financial performance over a particular duration.