In January 2021, Hope Corporation has financed a new facility next to its current facility with a
Question:
In January 2021, Hope Corporation has financed a new facility next to its current facility with a large long-term note payable. As a condition of obtaining the long-term loan, Hope Corporation agreed with the lender to maintain a current ratio at year-end 2021 of at least 1.8.
If Hope Corporation fails to maintain this ratio, the lender may demand immediate repayment of the principal amount of the long-term note payable accompanied with all unpaid interest. As the end of the year 2021 approaches, the CEO of Hope Corporation is concerned about the degree of its current ratio.
As the Financial Manager of Hope Corporation, you are required by the CEO to suggest three actions that the Corporation might follow to increase the degree of the current ratio.
Financial Reporting And Analysis
ISBN: 9781260247848
8th Edition
Authors: Lawrence Revsine, Daniel Collins, Bruce Johnson, Fred Mittelstaedt, Leonard Soffer