Bradford Maintenance, a firm which provides lawn care services, has some seasonal variations in its cash flow needs, since much of the demand for its services is in the summer months. It uses long-term sources of funds to finance its assets such as its fleet of vehicles and lawn-care equipment and for the permanent funds that it must have at all times. For its peak seasonal needs it uses long-term sources and some short-term debt. What best describes the financial policy being followed by Bradford?

Question

Quizplus · Accepted Answer

Bradford Maintenance is following a conservative financial policy by using long-term financing for both permanent and seasonal needs, ensuring stability and reducing the risk associated with short-term financing.

Bradford Maintenance, a Firm Which Provides Lawn Care Services, Has