Increased use of long-term financing is generally a more conservative approach to current asset financing.

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Long-term financing typically involves borrowing funds for a longer period of time, generally exceeding one year. This approach can be considered more conservative because it provides a stable and predictable source of funding for long-term investments in current assets, such as inventory, property, plant, and equipment. On the other hand, short-term financing may provide more flexibility and lower interest rates, but it can also be more risky and subject to fluctuations in interest rates and market conditions.

Increased Use of Long-Term Financing Is Generally a More Conservative