With reference to Working Capital Financing Policy define the term "Conservative Policy"?

A conservative and more flexible working capital policy for a given level of turnover 

would be associated with maintaining a larger cash balance, perhaps even investing in 

short-term securities, offering more generous credit terms to customers and holding 

higher levels of inventory. Such a policy will give rise to a lower risk of financial 

problems or inventory problems, but at the expense of reducing profitability.