Company XYZ is a gadget manufacture based in Dallas, TX. The company was founded in 1995, by Mark Smith who serves as the President. Although the company maintains an excellent cash position, its working capital position and its cash conversion cycle has been hampered in recent years. However, Bank XYZ has an outstanding $2,000,000, ten-year amortizing equipment note with Company XYZ and that loan is paying as agreed. We have a current credit request from the borrower for a $1.5 million working capital line of credit. From our financial statement analysis, the borrower has daily cash need of $55,000. As a result of this cash need, its cash conversion cycle is a negative 6.21 days. But more troubling is that its operating cycle is 90 days and Company XZY is offsetting this cash need by waiting 97 days to pay its trade suppliers. Mark Smith believes that if we provide the company with permanent $1.5 Million line of credit its trade creditors will be paid timely and it will help the company's cash position by allowing it to fund its accounts receivable and inventory. The company's accounts receivables take about 40 days to collect and will use a 75% borrowing