Apex Fabricating, Inc., manufactures fenders and other after-market body panels for older automobiles. At the close of

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Apex Fabricating, Inc., manufactures fenders and other after-market body panels for older automobiles. At the close of last year, the firm had $10,381,800 in current assets and $4,152,720 in current liabilities. The company's managers want to increase its inventory, which will be financed using short-term debt. How much can the firm increase its inventory, financing it with short-term borrowing, without its current ratio falling below 2.0 (assuming all other current assets and current liabilities remain constant)?

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Financial Management Principles and Applications

ISBN: 978-0134417219

13th edition

Authors: Sheridan Titman, Arthur J. Keown, John H. Martin

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