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An Aggressive Working Capital policy has the following characteristics:

A. Low current assets and high current liabilities and a high current ratio
B. High long-term loans, low investment in inventory and high debt ratio
C. High levels of investment in inventory and debtors and a high current ratio.
D. Low levels of investment in inventory and debtors and a low current ratio.

User Sam Soffes
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Final answer:

An Aggressive Working Capital policy typically includes high levels of investment in inventory and debtors, resulting in a high current ratio, which aligns with option C in the given choices.

Step-by-step explanation:

An Aggressive Working Capital policy is characterized by a high level of investment in current assets such as inventory and receivables and a strategy to finance these assets with less current liabilities, resulting in a higher current ratio. This approach keeps more funds tied up in inventory and receivables, intending to fuel sales growth but at the expense of higher risk due to the larger amounts of cash tied up in operations. Options A and D suggesting low current assets for an aggressive working capital policy are incorrect. Option B focuses on long-term loans and debt ratio, which do not precisely reflect working capital strategies. Therefore, the correct characterisation for an aggressive working capital policy is most closely aligned with option C, where high levels of investment in inventory and debtors lead to a high current ratio.

User Nutty About Natty
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