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Aggressive vs conservative financing strategy

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What is an aggressive financing strategy? What are components of aggressive finance strategies? What is the difference between the aggressive and conservative financing models? Under what circumstances would you use either model?

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The solution explains aggressive and conservative financing strategies

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In working capital management we have the investment strategy - the amount of working capital that we would invest and the financing strategy - how that investment would be made. Both these are interlinked. Both these can be either aggressive or conservative.

In an aggressive investment policy, we keep the investment in working capital - accounts receivable and inventories very low while in a conservative investment policy we keep high levels of accounts receivable and inventories.

Now to finance these accounts receivables and inventories, we could use either an ...

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