Discuss the implications of the following note.How will it affect the company’s liquidity? How will it affect the company’s overall asset management policies?

Conry Publishing Company 1999 Annual Report Note 5 (Partial)

At December 31, 1999, the Company has a $10,000,000 Line of Credit Agreement

(“Credit Agreement”) with a bank. The Credit Agreement provides for a short-term, variable-rate line of credit under which the Company may borrow and repay from time to time until maturity on May 31, 2002. The Credit Agreement requires the Company to maintain compensating balances of $200,000 with the bank in lieu of annual commitment fees. No borrowings were outstanding under the Credit Agreement as of December 31, 1999.