how do firms finance their operating current assets?

How do firms finance their operating current assets? A firm's asset or capital requirements grow overtime and usually exhibit temporal (seasonal) variation. Firms must solve the challenge of how to finance their assets with a combination of short- and long-term financing. The following graph exhibits this relationship for a particular firm. Which of the following best characterizes this firm's policy of financing assets? Aggressive policy Moderate policy Conservative policy Note the shaded region on the preceding graph. Which of the following statements best describes the firm's situation during this time? The firm must rely on short-term borrowing. The firm has excess capital to invest in cash or marketable securities