4. Assume that a firm has a highly seasonal business and its data is given as follows.The

following summary balance sheet provides data for peak and off-peak seasons. (1000 dollars)

a. What is the amount of permanent current assets and fluctuating current assets of the company?

b.What kind of working capital policy does the company employ?

(10 Points)

Peak Off-Peak

Cash $50 30

Marketable securities 0 20

Accounts receivable 40 20

Inventories 100 50

Net fixed assets 500 500

Total Assets 690 620

Liabilities and Equity:

Spontaneous liabilities 30 10

Short-term debt 50 0

Long-term debt 300 300

Common equity 310 310

Total Claims 690 620