Case I Northland Cranberries Despite being a publicly traded company only since 1987. Northland Cranberries (USA) of Wisconsin Rapids, Wisconsin, is one of the world's largest cranberry growers. Despite its short life as a publicly traded company, it has engaged in an aggressive growth strategy. 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. Northland Cranberries Current Year Prior Year Current 56.745.750 $ 5.508054 To 107 744751 83 074 339 10 168 585 44687 73.118.204 49.48.787 Shareholders' y 346 547 33.125 552 21.733.66 18.051355 Cost of goods od 13.057 275 8.751.220 erst expense 3.654.00 2303792 Income tax expense 1.051.000 1.917.000 Net income 1.581,707 2.942 954 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 by the company in the Management Discussion and Analysis section of the company's annual report Comment on whether you agree with management's statements, and what might be done to remedy the situation. The lower comparative current ratio in the current year was due to $3 million of short-term borrowing then outstanding which was incurred to fund the Yellow River Marsh acquisitions last year. As a result of the extreme seasonality of its business, the company does not believe that its current ratio or its underlying stated working capital at the current, fiscal year-end is a meaningful indication of the Company's liquidity. As of March 31 of each fiscal year, the Company has historically carried no significant amounts of inventories and by such date all of the Company's accounts receivable from its crop sold for processing under the supply agreements have been paid in cash, with the resulting cash received from such payments used to reduce indebtedness. The Company utilizes its revolving bank credit facility, together with cash generated from operations, to fund its working capital requirements throughout its growing season