Carlton, Inc presented the following information in a note to its financial statements for the year ending December 31, 2016: The company has a loan agreement with Beachside Bank that states: 1 . The current ratio should remain at least 2.0 to 1 at all times. 2 . The debt-to-equity ratio should not exceed .7 to 1 at any time. 3 . The times-interest-earned should be 5.0 or better. 4 . The
inventory-turnover should be 4.0 or better. The ratios at year-end are: current ratio, 2.3 to 1; debt-to-equity ratio, .6 to 1; times-interest-earned, 7.1; and inventory-turnover, 3.7 . Which of the following statements is true?
a. Carlton was in default because of the inventory turnover.
b. Carlton was in default because of the current ratio.
c. Carlton was in default because of the debt-to-equity ratio.
d. Carlton was in default because of the times-interest-earned.
a
You might also like to view...
________ aims to create liking, preference, conviction, and purchase of a product or service
A) Corporate advertising B) Reminder advertising C) Persuasive advertising D) Reinforcement advertising E) Informational advertising
The major disadvantage of an empty shell solution as a second site backup is
a. the host site may be unwilling to disrupt its processing needs to process the critical applications of the disaster stricken company b. recovery depends on the availability of necessary computer hardware c. maintenance of excess hardware capacity d. the control of the shell site is an administrative drain on the company
In a SWOT analysis, opportunities and threats originate ________ an organization.
A. Inside (internally) B. Outside (externally) C. Both A and B D. None of these
Answer the following statements true (T) or false (F)
1. New technologies aim to give guests more of what they want, need, and expect from a service organization. 2. The front and back of the house operations do not need to communicate that much in hospitality and service organizations because they are independent of one another. 3. POS systems have complicated the communication between front and back of the house employees. 4. Some POS systems can be accessed from anywhere around the world.