Purchase Solution

Some Business Questions

Not what you're looking for?

Ask Custom Question

1. What is an aggressive financing strategy?

2. What are the components of aggressive finance strategies?

3. What is difference between the aggressive and conservative financing model?

4. Under what circumstances would you use either one?

Purchase this Solution

Solution Summary

The response addresses the queries posted in 722 Words, APA References

Solution Preview

The response addresses the queries posted in 722 Words, APA References
1.

An aggressive financing strategy is one that uses the short-term funds for financing all the seasonal needs of a firm and a part of its permanent needs (An Aggressive Financing Strategy, 2008). It finances only some of its fixed assets (and not all the current needs and requirements) through long term funds.

The cost considerations in an aggressive strategy include the following:

It lowers the cost through the use of most of the cheaper short-term financing.
It should result in high profitability.
The risk considerations under such a strategy are:

It possesses a high risk due to the reason that the net working capital is minimized
It might be difficult to get the long-term funds in an emergency.
2.

Under an aggressive finance strategy, the firm finances a part of its permanent current assets and even its fixed assets with the short term sources of funds (Horne, Wachowicz & Bhaduri, 2008). The short term sources of funds include the short term loans, bank overdraft, marketable securities and accounts payable.

3.

A conservative financing strategy is one that employs ...

Solution provided by:
Education
  • MBA (IP), International Center for Internationa Business
  • BBA, University of Rajasthan
Recent Feedback
  • "Thank You so much! "
  • "Always provide great help, I highly recommend Mr. Sharma over others, thanks again. "
  • "great job. I will need another help from you. "
  • "first class!"
  • "Thank you for your great notes. Will you be willing to help me with one more assignment? "
Purchase this Solution


Free BrainMass Quizzes
Managing the Older Worker

This quiz will let you know some of the basics of dealing with older workers. This is increasingly important for managers and human resource workers as many countries are facing an increase in older people in the workforce

Production and cost theory

Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.

Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.

Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking