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What do you understand by the term "Aggressive Policy" with reference to Working Capital Financing ?

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Question added by Deleted user
Date Posted: 2014/08/10
Kamran Anjum
by Kamran Anjum , Head of Internal Audit , Rafhan Maize Products Company limited, Faisalabad, Pakistan, Ingredion Incorporated Gmbh

An aggressive policy with regard to the level of investment in working capital means 

that a company chooses to operate with lower levels of inventory, trade receivables 

and cash for a given level of activity or sales. An aggressive policy will increase 

profitability since less cash will be tied up in current assets, but it will also increase 

risk since the possibility of cash shortages or running out of inventory is increased.

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