As a manager of UOY bank, will you approve this credit line application? Why or why not?

5. (Credit Analysis) KDM company applies a revolving credit line of amount $20 million from two year from UOY Bank to be used as working capital. The credit grade of KDM company is A, and the main product is Brand KDM distilled water. Here is the balance sheet of KDM company (in $ million) 2001 2002 2001 2002 Current Asset 15.20 15.40 Current Liability 10.90 10.50 Cash 0.35 2.01 Short-term debt 0 0 Accounts receivable 5.94 3.32 Accounts payable 5.41 4.51 Inventory 8.45 7.56 Other 5.49 6.39 Other 1.48 2.55 Long-term Debt 0 Fixed Asset 10.20 11.05 Equity 15 16.45 Intangible Asset 0.50 0.50 Asset 25.90 26.95 Liability and Equity 25.90 26.95 The sales and profits in the recent two year are summarized as following (in $ millions) 2001 2002 Sales 52.10 442.71 Net Profit 1.45 39.45 KDM company plans to put 50% of its land, plant, and machinery developed by itself as collateral, the total worth of the collateral is $45 million. As a manager of UOY bank, will you approve this credit line application? Why or why not