HW 3.xlsx - Q4-9 Liquidity measures how fast a company can...

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Q4-9. Liquidity measures how fast a company can turn an asset into cash and solvency mea pay off their debts. They are important because they measure how well a company is handle their debts. Q4-12. Lenders impose covenants to limit their risk if the borrower happens to default on the Lenders can require the borrower to take certain actions, such as submitting financial restrict the borrower from taking certain actions, such as preventing mergers, and require the borrower to maintain specific financial conditions, such as maintain c M4-17. They are less risky because although the solvency ratios increased, the liquidity ratios meaning that the company will be able to pay off their debts more easily, even in the E4-26. 2016 2015 Cash 595 827 Accounts Receivable 196 2,306 Current Assets 3,014 5,224 Current Liabilities 2,911 2,800 Long-Term Debt 2,795 3,123 Short-Term Debt 10 8 Total Liabilities 6,827 6,805 Interest Expense 153 156 Capital Expenditures 1,082 861 Equity 871 2,440 Cash from Operations 2,451 1,220 Earnings Before Interest and Taxes 1,101 1,323 a. 2016 2015 Current Ratio = 1.03538303 1.86571429
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