Ski Lifts Inc. is in a highly seasonal business, and the following summary balance sheet data show its assets and liabilities at peak and off-peak seasons (in thousands of dollars) :
What can we conclude from this data?
A) Ski Lifts's working capital financing policy calls for exactly matching asset and liability maturities.
B) Ski Lifts's working capital financing policy is relatively aggressive; that is, the company finances some of its permanent assets with short-term discretionary debt.
C) Ski Lifts follows a relatively conservative approach to working capital financing; that is, some of its short-term needs are met by permanent capital.
D) Without income statement data, we cannot determine the aggressiveness or conservatism of the company's working capital financing policy.
Correct Answer:
Verified
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