What is maturity matching approach?
Hedge risk by matching the maturities of assets and
liabilities.
Permanent current assets are financed with long-term financing,
while temporary current assets are financed with short-term
financing.
There are no excess funds.
Related Q&A：
Well, one major criticism of the classical approach to financing is that it often assumes a perfect and stable market. But come on, we all know markets are anything but perfect and stable! Another thing is that it might overlook the impact of human behavior and emotions on financial decisions. Like, people don't always act rationally, you know? Also, it might not take into account unforeseen circumstances or sudden changes in the economic environment. That can really throw a wrench in the works!
