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Asked by Michelle Kuruc on Jul 12, 2024

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Which of the following would NOT fall under the heading of short-term financial planning?

A) A firm is considering increasing inventory to increase responsiveness to its customers.
B) A firm is considering steps to shorten its collection period.
C) A firm is considering making it easier for customers to purchase on credit.
D) A firm is considering offering cash discounts to customers if they pay within 10 days.
E) A firm is considering whether to pay a stock dividend or not.

Short-term Financial Planning

The process of identifying a company's immediate financial needs and devising strategies to meet those needs within a year or less.

Collection Period

The average number of days required to collect receivables from customers.

Stock Dividend

Payment made by a firm to its owners in the form of stock, diluting the value of each share outstanding.

  • Acknowledge the repercussions of diverse financial approaches on a company's management of liquidity and cash assets.
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Rudali GoveiaJul 15, 2024
Final Answer :
E
Explanation :
Short-term financial planning typically involves decisions that affect a company's operations within a year or less, such as managing inventory, credit terms, and collection periods. Paying a stock dividend is a decision related to the distribution of profits and shareholder returns, which falls under long-term financial planning and strategic decision-making.

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