That picture is not fat, it's normal. The problem is magazines and stuff have painted a false picture of what healthy size for a woman is. Most of those are also photoshopped. Being able to wrap your hands around a waist is NOT a healthy size.
The picture really is at the heavy end of the range of what's acceptable but she has a cute face so I wouldn't be ashamed if my friends caught me with her. Plus it gets cold here in the winter so... :$