Summary Balance Sheet Data for Greener Gardens Co

question 53

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: 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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