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Tidewater Inc., a retailer, provided the following financial information for its most recent fiscal year:

Net income............................................................... $ $945,000$ Return on invested capital $................................................$

$8\%$

Cash flows used for operating activities $...................................$ $$(1,428,000)$ Cash flows from investing activities $.......................................$ Cash flows from financing activities $.......................................$

$$600,000$ $$900,000$

The company$\mathrm{’}$s $\mathrm{“}$Cash flows from $($used for$)$ operating activities$\mathrm{”}$ section is as follows:

Net income............................................................... $ $945,000$ Depreciation..............................................................

Increase in accounts receivable $...........................................$ Increase in inventory......................................................

Decrease in accounts payable............................................. $210,000$

$(1,134,000)\text{Â }(1,260,000)\text{Â }(189,000)$

Net cash flows used for operating activities $...............................$ $$(1,428,000)$An examination of the financial statements revealed the following additional informa$-$tion: $\mathrm{▪}$ Revenues increased during the year as a result of an aggressive marketing campaign aimed at increasing the number of new $\mathrm{“}$Tidewater Card$\mathrm{”}$ credit card customers. This is the company$\mathrm{’}$s branded credit card, which can only be used at Tidewater stores. The credit card balances are accounts receivable on Tidewater$\mathrm{’}$s balance sheet.

$\mathrm{▪}$ Some suppliers have made their merchandise available at a deep discount. As a result, the company purchased large quantities of these goods in an attempt to improve the company$\mathrm{’}$s profitability.

$\mathrm{▪}$ In recent years, the company has struggled to pay its accounts payable on time. The company has improved on this during the past year and is nearly caught up on over$-$due payables balances.

$\mathrm{▪}$ The company reported net losses in each of the two prior years. Write a brief memo to your instructor evaluating the financial condition of Tidewater Inc

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