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Discretionary Accounting
The practice of using judgment in financial reporting and making decisions on accounting policies where alternatives exist.
Covenant Violations
Occurrences when a borrower fails to meet the terms of a loan agreement, potentially leading to penalties or loan default.
Current Ratio
A financial metric that evaluates a firm's capacity to settle debts due within a year by comparing its current assets to its current liabilities.
Accounting-Based Covenants
Agreements or clauses within contracts that require a borrower to meet certain financial metrics or conditions, based on accounting figures.
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