Fundamentals of Financial Manageme...

14th Edition
Eugene F. Brigham + 1 other
ISBN: 9781285867977



Fundamentals of Financial Manageme...

14th Edition
Eugene F. Brigham + 1 other
ISBN: 9781285867977
Textbook Problem

What does it mean to adopt a maturity matching approach to financing assets, including current assets? How would a more aggressive or a more conservative approach differ from the maturity matching approach, and how would each affect expected profits and risk? In general, is one approach better than the others?

Summary Introduction

To explain: The maturity matching approach and its difference from aggressive or conservative approach and the effect of this approach on profits and on risk and, the approach which is most suitable.


Current Assets:

Any asset, which can be reported in the form of cash within the duration of 1 financial year is classified as current assets.


Maturity matching approach:

This approach states that the maturity of company’s assets and liabilities should be coordinated to maintain a balance.

Difference of maturity matching approach from aggressive or conservative approach:

Maturity matching approachAggressive approachConservative approach
The requirement of funds for short-term should be fulfilled by using short-term debts, and for long-term should be fulfilled by using long-term debts.The requirement of funds even for long-term fulfilled by using short-term debts.All kind of fund requirements are fulfilled by using long-term debts

Table (1)

Effect of approaches on profits and risk:


Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

What are the major elements of Herzbergs motivationhygiene theory?

Foundations of Business (MindTap Course List)

What is a physical data flow diagram (DFD)?

Accounting Information Systems

What is keystroke monitoring?

Accounting Information Systems

REQUIRED ANNUITY PAYMENTS A father is now planning a saving program to put his daughter through college. She is...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)