Understanding the risks of using short-term funds to finance long-term assets is crucial for effective fund management in any business. Short-term funds are intended for immediate liquidity needs, while long-term assets require time to yield returns. When businesses depend on short-term financing for long-term investments, they expose themselves to potential cash flow challenges when those short-term liabilities become due. Aligning your funding strategy with the nature of your investments is vital for maintaining financial stability and fostering sustainable growth. #finance #money #business #fundmanagement #financialstability #accounts #growth.
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