The Nelson Company has $1,875,000 in current assets and $625,000in current liabilities. It
The Nelson Company has $1,875,000 in current assets and $625,000in current liabilities. Its initial inventory level is $375,000,and it will raise funds as additional notes payable and use them toincrease inventory.
How much can Nelson's short-term debt (notes payable) increasewithout pushing its current ratio below 1.2? Round your answer tothe nearest cent.
What will be the firm's quick ratio after Nelson has raised themaximum amount of short-term funds? Round your answer to twodecimal places.