Company is currentu in compliance with its loan covenant

Assignment Help Financial Accounting

Reference no: EM131211552

Assume you work as an assistant to the CFO of Fashions First, Ic. The CFO reminds you that the fiscal year end is only weeks away and that he is looking to you to ensure that the company stays in compliance with its loan covenant to maintainm a debt to asset ratio of no more than 75 %. A reviewm pf the genera; ledger indicates that assets total 690,000 and liabiklites are 570,000, Your company has an excess of of cash (300,000) and an equally large balance in accounts payable (270,000) although none of its accoutns payable are due until nest month.

1) determine whenteer the company is currentu in compliance with its loan covenant

2) assuming the level of assets and liabilities remains unchanged until the last day of the fiscal year, evaluate whether Fashion First should pay down the 210,000 oif its accounts payable on the last day of the eyar before thje accounts payable become due.

Reference no: EM131211552

Questions Cloud

Analyze major complexities that would arise under expansion : Examine the major complexities that would arise under expansion via capital projects. Propose key actions that the company could take in order to prevent or address these complexities.

The amount of pension expense to be reported : Presented below is pension information related to Woods, Inc. for the year 2013. Service cost $85,000 Interest on projected benefit obligation $66,000 Interest on vested benefits $30,000 Amortization of prior service cost due to increase in benefits ..

How do we get the revenue that can be recognized : Smokey International Inc recently aquired the Kurtz Builders Company. Kurtz has incomplete accounting records. On one particular project, only the information below is available. Cost incurred during year ..... 2014 $200,000.00, 2015 $250,000.00. , 2..

Preferences for consumption and leisure : Jessica's preferences for consumption and leisure can be expressed as U(C,L)=(C-100)x(L-40) There are 110 hours in the week to split between work and leisure. Jessica earns $10 per hour after taxes. She also receives $300 worth of welfare benefits..

Company is currentu in compliance with its loan covenant : Assume you work as an assistant to the CFO of Fashions First, Ic. The CFO reminds you that the fiscal year end is only weeks away and that he is looking to you to ensure that the company stays in compliance with its loan covenant to maintainm a debt ..

Are credit cards or debit cards money : 1. Are credit cards or debit cards money? Explain your answer. 2. "When the Fed makes an open market purchase of government securities, the quantity of money will eventually decrease by a fraction of the initial change in the monetary base." Is th..

Evaluate degradation due to flat rayleigh fading : Write a computer program to evaluate degradation due to flat Rayleigh fading at a specified error probability. Include PSK, FSK, DPSK, and noncoherent FSK.

Find what is the maximum you would pay for the investment : What is the maximum you would pay for this investment if your opportunity cost is 12%? If you are offered that same investment for $70,000 today, what rate of return would you be earning?

Experience in working with a group : Discuss your experience in working with a group. Did your group experience group cohesiveness? Did you experience a positive or negative outcome? Please explain and provide examples. Please describe the organizational climate/culture during this e..

User Account

All Pages