Minicase 2 Northland Cranberries}
Despite being a publicly traded company only since 1987, Northland Cranberries of Wisconsin Rapids, Wisconsin, is the world's largest cranberry grower. It has engaged in an aggressive growth strategy, and as a consequence, the company has taken on significant amounts of both short-term and long-term debt. The following information is taken from recent annual reports of the company:

\section*{Instructions}

(a) Evaluate the company's liquidity by calculating and analyzing working capital and the current ratio.

(b) The following discussion of the company's liquidity was provided in the Management Discussion and Analysis section of the company's 1995 annual report. Comment on whether you agree with management's statements and what might be done to remedy the situation.

(c) Evaluate the company's solvency using the debt to total assets ratio and the times interest earned ratio.

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1995 Current assets $ 6,745,759 1994 $ 5,598,054 Total assets Current liabilities Total liabilities 107,744,751 83,074,339 10,168,685 4,484,687 73,118,204 49,948,787 Stockholders' equity 34,626,547 33,125,552 Net sales 21,783,966 18,051,355 Cost of goods sold 13,057,275 8,751,220 Interest expense 3,654,006 2,393,792 Income tax expense 1,051,000 1,917,000 Net income 1,581,707 2,942,954