Short-Term Financial Policy
Flexible Policy
–Large amounts of cash and marketable securities
–Large amounts of inventory
–Liberal credit policies (large accounts receivable)
–Relatively low levels of short-term liabilities
High liquidity
Restrictive Policy
–Low cash and marketable security balances
–Low inventory levels
–Little or no credit sales (low accounts receivable)
–Relatively high levels of short-term liabilities
Low liquidity