Your boss came to you and asked, how can you make the current ratio higher?You know the company has a line of credit with the local bank that requirues the company to maintain its current ratio at 1.5. You also know that the company was dangerously close to violating this covenant during the previous quarter.the end of the fiscal is next week and some action must be taken to increase the current ratio.If the covenant is violated, the lending agreement allows the bank to significantly modify the terms of the debt (in thee bank's favor)and also gives the bank a seat on the company's board of directors. Management would prefer not to have the bank involved in the day-to-day affairs of the business, nor do they want to alter the terms of the lending of the lending agreement.
QUESTIONS: Would any of the alternatives identified be good for the business, e.g. selling equipment might raise current ratio but would that be good for the business? Should the company engage in these types of transactions? Identify ways in which current ratio can be increased.

Please answer the above questions.

[Please answer the above questions. Your answer will be very helpful

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