The new owners of Bluegrass Foods, Inc. have hired you to help them diagnose and cure the problems that the company has had in maintaining adequate liquidity. As a first step, you perform a liquidity analysis. You then do an analysis of the company's short-term activity ratios. Your calculations and appropriate industry norms are given in the attached file:
a) What recommendations relative to the amount and the handling of inventory could you make to the new owners?
b) What recommendations relative to the amount and the handling of the account receivable could you make to the new owners?
c) What recommendations relative to the amount and the handling of the account payable could you make to the new owners?
d) What results, overall, would you hope your recommendations would achieve? Why might your recommendations not be effective?