Asked by XxCloud StrifexX on Jun 25, 2024
Verified
Minimal credit sales are associated with a restrictive short-term financial policy.
Minimal Credit Sales
The lowest volume of sales that a company makes on credit, impacting cash flow and credit management.
Restrictive Policy
Economic policies implemented to reduce inflation, stabilize currency, or restrict credit growth through measures such as increasing interest rates or reducing government spending.
- Discern the role of immediate financial policies in shaping a firm's liquidity and operational performance.
- Compare and contrast restrictive and flexible short-term financial management approaches.
Verified Answer
JR
Julisa RamosJun 28, 2024
Final Answer :
True
Explanation :
A restrictive short-term financial policy typically involves minimizing current assets relative to total assets, which includes keeping credit sales low to reduce accounts receivable and thus minimize the funds tied up in short-term assets.
Learning Objectives
- Discern the role of immediate financial policies in shaping a firm's liquidity and operational performance.
- Compare and contrast restrictive and flexible short-term financial management approaches.
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