The stewart company has $2,392,500 in current assets and $1,076,625 in current liabilities. its initial inventory level is $526,350, and it will raise funds as additional notes payable and use them to increase inventory. how much can its short-term debt (notes payable) increase without pushing its current ratio below 2.0?

the short-term debt can increase by 1,339,800 without pushing the current ratio below 2.

Explanation:

current ratio:

if we want a current ratio of at least 2 and current assets are 2,392,500 dollars then:

the fund raised will also increase the current assets as thecompany will recieve cash.

raised funds: 1,339,800

checking:

(2,392,500+ 1,339,800) / (526,350 + 1,339,800)

3,732,300‬  / 1,866,150 = 2

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