The new owners of Bluegrass Natural Foods, Inc., have hired
you to help them diagnose and cure 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 listed here
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 accounts receivable could you make to the new owners?
c. What recommendations relative to the amount and the handling of accounts 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?
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