Foreman Inc. was in a bind. The mid-sized manufacturer had experienced phenomenal growth in the last three years. Sales had gone through the roof, thanks to an eager and creative marketing group that had come up with some clever strategies to expand sales by offering discounts or deferred payments. Margins were healthy, despite the discounts. Net income after taxes was sizable for a company this size. Why, then, were they struggling to make payroll? And lately, the Accounts Payable supervisor was fielding more and more angry vendor calls about late payments. This had already caused one vendor to put the company on COD (cash on delivery) terms, a huge problem since this was one of their key vendors that provided a large amount of the material required in their manufacturing process. How can this be? Profits have never been so high!

Question 1: What is your assessment of F&Ds problem?

Question 2: Provide a reasonable recommendation that might help alleviate F&Ds struggle.