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    Question

    A company follows a conservative working capital

    financing policy. Which of the following statements best describes its financing approach?
    A It intentionally maintains a current ratio below 1 to maximise return on equity. Correct Answer Incorrect Answer
    B It relies heavily on short-term borrowings to finance even its permanent working capital Correct Answer Incorrect Answer
    C It follows perfect matching of maturities between assets and liabilities Correct Answer Incorrect Answer
    D It uses lung-term funds to finance both permanent and a portion of temporary working capital Correct Answer Incorrect Answer

    Solution

    The correct answer is D

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