Holidays, Etc. produces and distributes seasonal merchandise to retail outlets. The firm has adopted a compromise short-term financial policy. Given this information, which one of the following statements must be true?

Question

Quizplus · Accepted Answer

A compromise short-term financial policy typically involves a mix of internal financing (such as retained earnings) and external financing (such as short-term borrowing) to meet the firm's needs. This approach allows a company to adapt to varying financial requirements and opportunities, such as investing surplus funds in marketable securities when available and borrowing when necessary.