Short-term financing

Short-term financing is dynamic due to short maturity normally within a year. Short-
term finance is riskier than long-term financing, but it is also less expensive and provides the
borrower with more flexibility. In additionally, example of short-term financing are trade
credit, bank loan and commercial paper. We choose short-term financing because the
company can generate profit, although company can roll money quickly compared to long-
term financing. Based on comparison of Maxis Company in 2020 and 2021, it shows their
leverage ratio which is Debt Ratio in 2021 is lower and better than in 2020. It stated that
2020 is 445.92% and in 2021 is 45%.

Furthermore, Aggressive Approach it is because it uses short-term or temporary

financing to support a relatively large portion of current assets. In this plan, Maxis Company
finance all fixed assets with long-term financing, but only a portion of the permanent current
assets would be long-term financing. The remaining permanent and the fluctuating current
assets would be financed with short-term borrowing. This approach is riskier for the firm
because the current ratio is less than one and there are potential problems in renewing the
short-term borrowing arrangements. However, short-term debt is often cheaper than long-
term debt, so Maxis Company may be willing to sacrifice safety for possibly higher profits.
 Additionally, there are also advantages and disadvantages of Maxis Company. Now,
let’s talk about the advantages. First, special offers for target groups such as the
teenagers. For instance, Maxis promotes special offers such as the use of YouTube and
unlimited phone calls to customers in each shopping complex. Moreover, strong brand
reputation. This being the case, Maxis is making improvements to maintain their reputation,
even though some customers have complained about their online service.

Lastly, the disadvantages are interruption of the line in certain areas. This being the
case, service users are forced to choose other plans or services such as Digi, Celcom, Unifi,
and others. Furthermore, bad customer services. This is because when customers call Maxis
centers to ask them some questions but they don't pick up or answer the phone calls.