Interpreting liquidity and activity ratiosThe 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

Ratio	Bluegrass	Industry norm
Current ratio	4.4	3.9
Quick ratio	1.9	3.1
Inventory turnover	6.1	10.4
Average collection period	71 days	49 days
Average payment period	31 days	39 days

.

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?