This table is a representation of the trade-off in Liquidity and Financing in selecting an Optimal Policy for your business. Explain : Asset liquidity, Financing Plan, and Inventory Policy. Then explain If you were to ran a business and you look at this table where do you see your risk profile? Explain what type of business and what would you choose for Liquidity, Financing and Inventory policy.

Figure 6-11 Net working capital as a percentage of sales and the current ratio Current ratio Working capital to sales expressed as % 18 1.8 Average current ratio 1.6 1.4 1.2 1.0 0.8 0.6 0.4 16 Average working capital to sales (%) 14 12 10 8 0.2