The new owners of Bluegrass Natural Foods, Inc., have hired you to help them diagnose and cure

Question:

The 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.

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 beeffective?

Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...