Final answer:
The statement is false; permanent current assets should be financed with long-term financing, not short-term borrowings, to avoid liquidity risks and financial instability.
Step-by-step explanation:
The statement "Ideally, permanent current assets should be financed exclusively with short-term borrowings" is false. Permanent current assets, which are assets that a company needs to operate continuously, should ideally be financed with long-term financing sources. The reason is that short-term borrowings are subject to renewal risk and frequent interest rate fluctuations. Long-term financing such as issuing bonds or equity provides greater stability and matches the duration of the assets being financed to the duration of the financing.
Financing permanent current assets with short-term borrowings can put a company at the risk of facing liquidity crises if they are unable to roll over the debt frequently. Businesses must manage their asset-liability time mismatch carefully to ensure they can meet their obligations and support sustainable growth. Funding long-term assets with long-term liabilities is a fundamental principle of sound financial management and planning.