Juan Gomez Is a Loans Officer with the Canadian Bank

Juan Gomez is a loans officer with the Canadian Bank.Yesterday Chris Anstey, the owner of Haines Meat Packing Ltd, met with Juan to discuss the possibility of Canadian Bank's opening up a $100,000 line of credit for the company to help with working capital management.Mr Anstey indicated that he would be willing to pledge his accounts receivable as security for the line of credit.Mr.Anstey presented Mr.Gomez with the following information related to the financial operations of Haines Meat Packing: $$\begin{array} { l r } \text { Current Assets } & \$ 450,000 \\\text { Inventory } & \$ 180,000 \\\text { Current Liabilities } & 400,000 \\\text { Average accounts receivable } & \$ 245,000 \\\text { Sales for 2008 } & \$ 1,250,000 \\\text { Percentage of sales on credit } & 75 \%\end{array}$$ Mr.Gomez has done some research and discovered that similar businesses generally collect their accounts receivables within 45 days, have current ratios around 1.2 and quick ratios of .80.
Required:
A) Evaluate the liquidity of Haines Meat Packing.
B) Is there any other information you would like to have?
C) Assume the role of Juan Gomez; based on the information you do have, would you approve the line of credit? Explain your reasoning.