Inventory and accounts receivable without violating terms

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Reference no: EM13813443

Sees Inc. has an agreement with it banks that allow Sees to borrow money on a short term basis to finance its inventories and accounts receivable. The agreement requires Sees to maintain a current ratio of 2.1 or higher and a debt ratio of 65% or lower. From the balance sheet, Sees has total assets of $1,375,000, current assets of $875,000, and total debts of $800,000 (consist of current liabilities of $195,750 and long-term debt of $604,250). Determine how much Sees could borrow this time to invest in inventory and accounts receivable without violating the terms of its borrowing agreement.

Reference no: EM13813443

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