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Current Ratio Covenant Sample Clause

Book Publication Date: Nov 2014
Description: Coverage tests are financial covenants that relate to a company's ability to service its debt out of income or cash flow.This sample clause requires a company to maintain a particular ratio of consolidated current assets to consolidated current liabilities.
Type: Contract Clauses
PLI Item #: 129900
Practice Area: Banking and finance, Corporate finance

Keywords: "current ratio"; "GAAP"; "generally accepted accounting principles"; "consolidated current assets"; "consolidated current liabilities"; "consolidated working capital"; borrower; "consolidated subsidiary"

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