As a general rule, it is desirable to finance the permanent assets, including "permanent current assets," with long-term debt and equity.

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Permanent assets are those that are expected to provide benefits for more than one year. Financing these assets with long-term debt and equity is desirable because it matches the maturity of the assets with the maturity of the financing, which helps to reduce financing risk and improve the overall financial stability of the company. Additionally, financing permanent assets with short-term debt can lead to liquidity problems if the company is unable to refinance or repay the debt when it comes due.

As a General Rule, It Is Desirable to Finance the Permanent