Which One of the Following Statements Is Correct Concerning the Short-Term

Multiple Choice

Which one of the following statements is correct concerning the short-term financial policy of a firm?

A) A flexible short-term policy maintains a relatively low ratio of current assets to sales.
B) A restrictive short-term policy calls for less short-term debt and more long-term debt.
C) A flexible short-term policy closely resembles an all-cash-sales policy.
D) A flexible short-term policy leads to a high level of net working capital.
E) A restrictive short-term policy provides more liquidity than does a flexible policy.