Explain the meaning of, “The use of current liabilities as opposed to long-term debt exposes the firm to a greater risk of illiquidity”.

What are the advantages and limitations generally associated with the use of short-term debt?

Explain the meaning of, “The use of current liabilities as opposed to long-term debt exposes the firm to a greater risk of illiquidity”.

Explain how changes in the interest rate can impact the firm’s working capital policy.