To finance its rising inventories and receivables, Garden State turned to the bank for a long-term loan in 2005 and also increased its short-term credit lines in both 2005 and 2006. However, this expanded credit was insufficient to cover the asset expansion, so the company began to delay payments of its accounts payable until the second late notice had been received. Management realized that this was not a particularly wise decision for the long run, but they did not think it would be necessary to follow the policy for very long-the 2006 summer vegetable crop looked like a record breaker, and it was unlikely that a severe drough would pull out of the weak growht scenario in late 2006. Thus, the company was optimistic that its stable and profitable markets of the past would soon reappear.