A firm is managing its finances and aims to ensure that it has access to funds for the long term. It evaluates various sources like equity, debt,…

OR Trade credit is a facility offered by suppliers that allows the buyer to purchase goods and services now and pay later, typically within 30 to 90 days. While it may appear essential for operations and cash flow, it is actually a form of short-term financing. It is: (i) A part of working capital management. (ii) Used to fund day-to-day operational needs. (iii) Thus, not suitable or classified as a long-term source of finance.