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New Edgemere Company has this asset section of its common-size balance sheets for Year 1 and Year 2:

Year 1 Year 2

Cash 4% 4%

Accounts Receivable 15% 25%

Inventory 30% 21%

Property, Plant, and Equipment 50% 40%

Which ONE of the following statements is true?

• In Year 2, efficient management of Inventory is a problem.
• In Year 2, efficient management of Property, Plant, and Equipment is a problem.
• In Year 2, efficient management of Cash is a problem.
• In Year 2, efficient management of Accounts Receivable is a problem.