(Identifying spontaneous, temporary, and permanent sources of financing) Classify each of the following sources of new financing as spontaneous, temporary, or permanent, and explain your choice:

a. A manufacturing firm enters into a loan agreement with its bank that calls for annual principal and interest payments spread over the next four years.

b. A retail firm orders new items of inventory that are charged to the firm’s trade credit.

c. A trucking firm issues common stock to the public and uses the proceeds to upgrade its tractor fleet.

Operating and Cash Conversion Cycles