Summary Balance Sheet Data for Greener Gardens Co From This Data We May Conclude That
A) Greener Gardens

question 39

Multiple Choice

Summary balance sheet data for Greener Gardens Co.is shown below (in thousands of dollars) .The company is in a highly seasonal business, and the data show its assets and liabilities at peak and off-peak seasons: $\begin{array}{c}\begin{array}{l}\text {Cash}\\\text {Marketable securities}\\\text {Accounts receivable}\\\text {Inventories}\\\text {Net fixed assets}\\\text {Total assets}\\\\\text {Payables and accruals}\\\text {Short-term bank debt}\\\text {Long-term debt}\\\text {Common equity}\\\text {Total cliams}\end{array}\begin{array}{rr}\text { Peak } & \text { Off-Peak } \\\$ 50 & \$ 30 \\0 & 20 \\40 & 20 \\100 & 50 \\\underline{500} & \underline{500} \\\$ 690 & \$ 620 \\& \\\$ 30 & \$ 10 \\50 & 0\\300 & 300 \\310 & 310 \\\underline{\$ 690} &\underline{ \$ 620} \end{array}\end{array}$
From this data we may conclude that

• A) Greener Gardens' current asset financing policy is relatively aggressive; that is, the company finances some of its permanent assets with short-term discretionary debt.
• B) Greener Gardens follows a relatively conservative approach to current asset financing; that is, some of its short-term needs are met by permanent capital.
• C) Without income statement data, we cannot determine the aggressiveness or conservatism of the company's current asset financing policy.
• D) Without cash flow data, we cannot determine the aggressiveness or conservatism of the company's current asset financing policy.
• E) Greener Gardens' current asset financing policy calls for exactly matching asset and liability maturities.

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Definitions:

Partnership Assets

Assets or property owned jointly by partners in a business partnership, used and managed for the benefit of the partnership.

Distribution

The process of making a product or service available for use or consumption by a consumer or business user, involving logistics, warehousing, and transportation.

RUPA

The Revised Uniform Partnership Act, which is a set of laws designed to govern the operations of partnerships in the United States.

Buyout

The purchase of a company's shares to gain control over it, often by another company or a group of investors.