Permanent current assets reflect the fact that current assets do not shrink to zero even when business is at a seasonal or cyclical low.Thus,permanent current assets represent a minimum level of current assets the firm must finance.

Question

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Permanent current assets are those current assets that a company must regularly have on hand to continue normal business operations. They are usually funded through long-term sources of capital, such as long-term debt and equity. These assets do not fluctuate with seasonal or cyclical changes in business activity and are considered a minimum level of current assets a company must maintain to operate effectively. Therefore, the given statement is true.

Permanent Current Assets Reflect the Fact That Current Assets Do