Asked by Raheal Pasha on Jul 27, 2024
Verified
A restrictive short-term financial policy, as compared to a more flexible policy, tends to cause a firm to lose sales due to a lack of inventory on hand.
Restrictive Policy
A policy that limits or restricts certain actions, typically implemented to control financial practices or prevent excessive risk-taking.
Inventory
The total amount of goods and materials held by a company intended for sale or used in the production of goods sold.
- Perceive the impact of short-term financial measures on a company's operational efficiency and liquidity.
- Analyze the distinction between conservative and liberal short-term financial policies.
- Understand the correlation between corporate policies and their impact on sales, liquidity events, and stock quantities.
Verified Answer
BN
Braden NobleJul 30, 2024
Final Answer :
True
Explanation :
A restrictive short-term financial policy typically involves lower levels of inventory and tighter credit terms, which can lead to stockouts and lost sales opportunities as the firm may not have sufficient inventory to meet demand.
Learning Objectives
- Perceive the impact of short-term financial measures on a company's operational efficiency and liquidity.
- Analyze the distinction between conservative and liberal short-term financial policies.
- Understand the correlation between corporate policies and their impact on sales, liquidity events, and stock quantities.
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