A restrictive short-term ﬁnancial policy, as compared to a more ﬂexible policy, tends to increase the
probability that a ﬁrm will face a cash-out situation.

Question

Quizplus · Accepted Answer

A restrictive short-term financial policy means that a firm is more conservative in their spending and may have less cash on hand, making it more likely they will face a cash-out situation where they may not have enough funds to meet immediate obligations.

A Restrictive Short-Term ﬁNancial Policy, as Compared to a More