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Hi sir, for september 2016 exam question 17(b), in the answer key it states the following
– Review current agreements with the bank to determine whether any key ratios or covenants have been breached with regards to the bank loan or any overdraft.
The key ratios actually relate to the overdraft and the covenants relate to the bank loan . Am i right sir ?
In principle, key ratios and covenants can apply to both loans and overdrafts. It is a matter of contract law: what undertakings have been agreed in exchange for the finance.
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