Question: Loan covenants require that E Gadget Corporation EGC generate 200 000 cash

Loan covenants require that E-Gadget Corporation (EGC) generate $200,000 cash from operating activities each year. Without intervening during the last month of the current year, EGC will generate only $180,000 cash from operations. What are the pros and cons of each of the following possible interventions: (a) pressuring customers to pay overdue accounts, (b) delaying payment of amounts owing to suppliers, and (c) purchasing additional equipment to increase depreciation?

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  • CreatedFebruary 27, 2015
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