You are the credit manager for Materials Supply Company. One of your sales staff has made a $50,000 credit sale to Stewart Electronics, a manufacturer of small computers. Your responsibility is to decide whether to approve the sale. You have the following data for the computer industry and Stewart Electronics:

For Stewart Electronics, you have the following data for the year ended December 31, 2009:
Sales revenue ............ $3,908,000
Net income ............. 359,000
Total assets ............. 3,626,000
Current ratio ............ 1.82
Debt to equity ratio ......... 0.37
Inventory turnover ratio ........ 1.79
Accounts receivable turnover ratio .... 3.62
The salesperson believes that Stewart Electronics would order about $200,000 per year of materials that would provide a gross margin of $35,000 to Materials Supply if reasonable credit terms could be arranged.

Required:
State whether or not you would grant authorization for Stewart to purchase on credit and support yourdecision.

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For the Years 2005 2009 Average annual sales growth Average annual operating income growth Average annual net income growth Average annual asset growth Average debt to equity ratio Average current ratio Average inventory turnover ratio Average accounts receivable turnover ratio Industry 13.4% 10.8% 14.4% 10.3% 0.32 4.04 2.53 3.95 Stewart Electronics 17.6% 9.7% 99% 14.2% 0.26 3.71 2.06 4.18