Using aggressive approach for financing a firm's assets, long term financing would be used only to finance fixed assets, while short term financing would be used to finance current assets including seasonal fluctuations.

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Aggressive financing approach means using more debt financing than equity financing. In this approach, long term financing is used to finance fixed assets, such as property, plant, and equipment, which have a long useful life and generate long term returns. Short term financing, such as lines of credit, is used to finance current assets, such as inventory and accounts receivables, which have a shorter useful life and fluctuate with the business cycle. This approach can increase the return on investment but also increases the risk of insolvency.

Using Aggressive Approach for Financing a Firm's Assets, Long Term