A conservative current operating asset financing approach will result in permanent current assets and some seasonal current assets being financed using long-term securities.

Question

Quizplus · Accepted Answer

A conservative approach to current asset financing involves using long-term securities to finance permanent current assets and some seasonal current assets. This approach aims to ensure that the company has a stable and reliable source of funding for its current assets, which in turn helps to ensure smooth operations and minimize liquidity risk. By using long-term financing, the company can also take advantage of potentially lower interest rates and avoid the costs and risks associated with short-term borrowing.

A Conservative Current Operating Asset Financing Approach Will Result in Permanent